Ompare and Contrast Fund and SFAS Accounting
As you describe the difference between fund accounting and the accounting methods required by Statement of Financial Accounting Standards (SFAS) Nos. 116 and 117, you will need to consider the following scenario:
Following are five unrelated transactions or events pertaining to Midwest Drug Treatment and Counseling Service Agency (a nongovernmental NPO) for its current fiscal year. Prepare journal entries to record each transaction or event.
A public-spirited citizen made an unrestricted cash gift of $300,000 to the agency.
The agency conducted its annual fund drive that raised $150,000 in cash and $175,000 in pledges, 1% of which are not expected to be collected. The pledges are not expected to be collected until the next fiscal year. The cash support is considered unrestricted.
The agency sponsored a charity carnival and walkathon that raised $120,000 in cash, from which $25,000 in direct costs of holding the special event were paid. (Net proceeds were $95,000)
The agency purchased a new computer data system for cash in the amount of $35,000 to improve its client database. The amount was paid from cash previously provided for that specific purpose by a local contributor.
Salaries and wages for the year amounted to $450,000, of which $30,000 remained unpaid at year end. (Ignore FICA and payroll tax withholdings)
Then, describe the process for becoming a tax-exempt organization. Why is it important for an accountant to understand this process?
Explain why Congress enacted the a?intermediate sanctionsa? legislation in 1996.
Describe the treatment of a not-for-profit, nongovernmental foundation that is related to a public university under GASBS 39 a?Determining Whether Certain Organizations Are Component Unitsa? (2002).
In general journal form, prepare the required entries for each of the following selected transactions of Coastal University, a state-funded public institution. Some of the transactions are related and some are not. Indicate in which fund each entry is being made.
A generous alumnus donated $200,000 that can only be used for diabetes research. The full $200,000 was received in FY06.
During FY06, expenses of $100,000 were made in cash for diabetes research (see Item 1).
$4,000,000 in long-term bonds were issued to construct a new parking garage on campus.
During FY06, the parking garage (see Item 3) was partially completed at a total cash expenditure of $2,400,000.
During 2006, interest was paid in the amount of $160,000 on the long-term bonds issued for the parking garage project (see Item 3).
Then, contrast and compare the statement of cash flows that a non-governmentally owned hospital would prepare to that a governmentally owned hospital would prepare.
Describe what prepaid health care plans are and outline related accounting issues.
Support your paper with a minimum of five (5) scholarly resources. In addition to these specified resources, other appropriate scholarly resources, including older articles, may be included.
Length: 4 pages not including title and reference pages
Your paper should demonstrate thoughtful consideration of the ideas and concepts that are presented in the course and provide new thoughts and insights relating directly to this topic. Your response should reflect scholarly writing and current APA standards.