accounting

Unit 2 - Not-for-Profit Accounting

Assignment 1

Assignment Type: Individual Project

Deliverable Length:              3 pairs of journal entries with notes

Points Possible:      100

You are believer that new employees should practice their accounting skills before "throwing them into the fire." Therefore, you have listed a series of transactions that require journal entries and updating of T-Accounts. You know that preparing nonprofit journal entries are easy, so you ask the new employee to

prepare, side by side, the correct journal entry for the identical transaction:

· once for a nonprofit entity

· once for a for-profit company

· include notes for each transaction

Transaction 1: Assume a nonprofit has a restricted fund for capital asset purchases. Compare the journal entries for the cash purchase of a $10,000 computer by the nonprofit, to how the journal entry would look for this for-profit.

 Transaction 2: Assume that a nonprofit has a need for $80,000 for a particular new marketing expenditure (and that the organization has received donations restricted for this purpose), and a for-profit entity needs to raise an additional $80,000 to pay for some unanticipated marketing expenses. How would the journal entities look at the acquisition of the funds and the subsequent spending of the funds?

 Transaction 3: The for-profit entity sells $120,000 with net 30-day terms, while the nonprofit entity has a fund raising drive for which they receive pledges of $120,000. How do the two journal entries look?

 Instructor Comments:

In this individual project assignment, make sure you put your journal entries in a proper journal entry format and make sure you specifically indicate which journal entry is for the nonprofit company and which journal entry is for the for-profit entity. Remember that when you release resources from restrictions that is a 2-step process.

 

Nonprofit
Date	Account Name	Amount to be debited
		Account Name		Amount to be credited
	Brief explanation of the journal entry

 

For profit
Date	Account Name	Amount to be debited
		Account Name		Amount to be credited
	Brief explanation of the journal entry