Question

Recording and Reporting Entries

Save the Turtles is a non-for-profit organization that was incorporated in 20X0 and has a December 31 year end. Save the Turtles had the following transactions during 20X0.

1. Volunteers donated $20,000 in time to help with answering the phones, mailing materials, and other clerical activities.
2. A business donated rent-free office space to the organization that would normally rent for $35,000 per year.
3. Office furniture worth $10,600 and with an estimated 10-year life was donated to the organization.
4. A fund drive raised $215,000 in cash and $100,000 in pledges that will be paid within one year. A state government grant of $50,000 was received for program operating costs.
5. Save the Turtles paid salaries and fringe benefits of $208,560 during the year and had $22,400 of accrued salaries and benefits at the end of the year.
6. Utilities expense for the year totaled $8,300 and other expenses for the year included $5,600 for telephone, $4,300 for supplies, and $14,200 for printing. There were no supplies remaining at the end of the year and accounts payable totaled $4,400.
7. Office equipment with a useful life of 5 years was purchased for $12,000.
8. The organization claims a full year of depreciation on fixed assets.
9. Ninety percent of pledges for 20X1 are estimated to be collectible.
10. Expenses were allocated to program services and support services in the following percentages: Public education—45%, Veterinary services—20%, Management and general—20%, Fundraising—15%.

Required:

• Make all necessary journal entries to record these transactions.
• Prepare a schedule of expenses by nature and function for the year ended December 31, 20X0.
• Show calculations for all questions.

Answer 1

Save the Turtles- Jouranl entries for the year 2020
		Debit($)	Credit($)
1	Cash	20000
	Funds received from donors		20000
	(Being amount received for mailing materials,
	clerical activities)
2	Rent	35000
	Funds received from donors		35000
	(Being office rent space given)
3	Furniture	10600
	Corpus fund		10600
4	Depreciation	1060		10 Years useful life, So 10% on 10600 is claimed
	Furniture		1060	as depreciation
5	Cash	215000
	Funds received from donors		215000
	(Being funds raised from donors)
6	Pledges receivable	100000		Because the amount received in pledges it will be recoverable
	Funds received from donors		100000	in next one year
	(Being amount received in pledges which are
	collectible in one year.)
7	Cash	50000
	Funds received from state government		50000
	(Being amount received for program
	operating costs)
8	Salaries	230960
	Cash		208560
	Salaries payable		22400
9	Utilities expense	8300
	Telephone expenses	5600
	Supplies	4300
	printing expenses	14200
	Accounts payable		4400
	Cash		28000
10	Office equipment	12000
	Cash		12000
11	Depreciation	2400		20% depreciation is taken because
	Office equipment		2400	the useful life of the asset is 5 years
	(Being depreciation on office equipment)
12	Public education	140319
	Veterinary services	62364
	Management and general	62364
	Fundraising	46773
	Rent expenses		35000
	Depreciation		3460
	Salaries		230960
	Utilities expense		8300
	Telephone expenses		5600
	Supplies		4300
	Printing expenses		14200
	Bad debts		10000
	(Being the expenses allocated for program services and support services)
13	Bad debts	10000		Because 90% only collectible
	Pledges receivable		10000	So the 10% pledges are bad debts
	(Being 10% is reversed for not recovery)
Calculation of Expenses during the year 2020
Rent expenses	35000
Depreciation	3460
Salaries	230960
Utilities expense	8300
Telephone expenses	5600
Supplies	4300
Printing expenses	14200
Bad debts	10000
	311820
Allocation of expenses function wise:
Public education	140319
Veterinary services	62364
Management and general	62364
Fundraising	46773
	311820