Accounting Assignment

·

Week 6 Assignment

Government and Not

-

For

-

Profit Accounting

Plants and Other Resources

For purposes of external

reporting, not

-

for

-

profits

—

unlike

governments in their governmental funds

—

do not distinguish

between plant and other types of resources.

In 2014, the Northwest Ballet Association (NBA), a not

-

for

-

profit performing arts organization, undertook a major capi

tal

campaign to fund a new theater, expected to cost $10 million.

It was quickly able to raise $6 million, all of which was donor

restricted. It borrowed the balance, issuing a five

-

year, 8

percent term note for $4 million.

During the year, the NBA broke g

round on the project and

incurred construction costs of $3.4 million. It earned $0.52

million in interest on temporary investments. It incurred and

paid $0.32 million in interest on the note. In addition, as

required by the note, it placed $0.7 million in

a reserve fund (a

specially dedicated bank account) for the repayment of the

debt.

Write a 1000 word, APA style paper that addresses the

following:

1.

To show how these transactions would be reflected on the

NBA’s financial statements, prepare a December 31,

2014

statement of financial position and statement of activies.

Assume that these were the only transactions in which the

organization engaged and that all available cash, except that in

the reserve fund, had been invested in short

-

term marketable

securiti

es. Be sure to properly classify all resources as to

whether they are temporarily restricted or unrestricted.

 Week 6 Assignment

Government and Not-For-Profit Accounting

Plants and Other Resources

For purposes of external reporting, not-for-profits—unlike

governments in their governmental funds—do not distinguish

between plant and other types of resources.

In 2014, the Northwest Ballet Association (NBA), a not-for-

profit performing arts organization, undertook a major capital

campaign to fund a new theater, expected to cost $10 million.

It was quickly able to raise $6 million, all of which was donor

restricted. It borrowed the balance, issuing a five-year, 8

percent term note for $4 million.

During the year, the NBA broke ground on the project and

incurred construction costs of $3.4 million. It earned $0.52

million in interest on temporary investments. It incurred and

paid $0.32 million in interest on the note. In addition, as

required by the note, it placed $0.7 million in a reserve fund (a

specially dedicated bank account) for the repayment of the

debt.

Write a 1000 word, APA style paper that addresses the

following:

1. To show how these transactions would be reflected on the

NBA’s financial statements, prepare a December 31, 2014

statement of financial position and statement of activies.

Assume that these were the only transactions in which the

organization engaged and that all available cash, except that in

the reserve fund, had been invested in short-term marketable

securities. Be sure to properly classify all resources as to

whether they are temporarily restricted or unrestricted.