Question

Community Assist for Refugees (CAR) is a not-for-profit organization that assists refugees with various services including language and cultural training, transportation, a food bank, and translation services. Some selected transactions for CAR are presented below.

1. CAR received a $5,000 cheque from a local radio station. The letter that came with the donation says that it can be used by CAR on whatever is most urgent.
2. CAR received a $10,000 donation from the Literacy Fund for a homework assistance project. The project is expected to start in a few months.
3. CAR received a $25,000 endowment contribution from Dr. Koe for a scholarship fund.
4. CAR received a donation of 50 student desks for its homework assistance project from City Office Supplies Ltd. The desks are valued at $10,000 and are expected to last 10 years.
5. The city donated a tract of land, valued at $30,000 to CAR. CAR plans to raise funds to construct a new centre on the land.
6. Assume that the homework assistance program is underway. The $10,000 donation in part (b) has been spent on materials and a part-time instructor.
7. Assume that at the end of the year, the endowment contribution in part (c) earned $500 in interest. Dr. Koe had specified that interest must be spent on future scholarships. CAR will wait until there is at least $2,000 in accumulated interest before distributing any scholarships.
8. At the end of the year, CAR records depreciation on the desks, using the straight-line method.

Required:

Prepare journal entries to record the above transactions on CAR’s books using

ii) the restricted fund method

Answer 1

Community assit for regugees (CAR) is a not for profit organization that assists refugees with various services inculding language and cultural training transportation a food bank and transiation services.
Ang community Assist for Refugees CCAR) is anot-for-profit organization that assists refugees with various services including language and cultural training, transportation, a food bank and translation services some selected trans cachons for CAR are presented below. All the neccesarry Journal entries have been passed hon Profit organisations are required to prepare 1 Receipts and payment account its like a consolidated cash book & income and expenditure account its just like Profit and loss account all the corpus funds . ie which have fixed Purpose will reflect in balance sheet in current liablities whereas all other fund which are free in nature will be passed through income and expenditure account. CAR (NPoJ Journal entries Particalas Recept ļ paymend Alc $ sooo TO Donation $ 5000 Donation Ale n $ 5000 To In cost En $ 5000 Ale 2) Receipt payment Alca To literacy $ 10,000 $ 10,000 3) Receipt $ 25,000 à payment Alch scholarship TO $ 25,000

ot Desks Paorticalars Alch To in cost eth $ 10,000 10,000 Alc Depreciation Alc on $ 10,000 Desks $10,000 $ 10,000 19000 5 an cast Eth Alch land Alca To a&E Alc $ 30,000 $ 39000 6 3 10,000 literacy and To Receipt Alca & payment Alc $ 10,000 (Being Amount spend on materials & Enstadion Payment Alca Recipt & $ 50 To antent 150 $ 50 anterst TO Alen scholarships $50