[timmyj]

Question # 1939 | Blueprint Area: 1 C ii : Statement of Activities
A voluntary health and welfare organization received a $700,000 permanent endowment during the year. The donor stipulated that the income and investment appreciation be used to maintain its senior center. The endowment fund reported a net investment appreciation of $80,000 and investment income of $50,000. The organization spent $60,000 to maintain its senior center during the year. What amount of change in net assets with donor restrictions should the organization report?
• A. $ 50,000
• B. $ 70,000
• C. $130,000
• D. $770,000
You answered D. The correct answer is B.
The restricted current fund is used for available financial resources and related liabilities that are expendable only for operating purposes specified by the donor. The change in net assets with donor restrictions would consist of the $80,000 investment appreciation, plus the $50,000 investment income, less the $60,000 spent to maintain the center. An endowment fund would be used to account for the $700,000 principal accepted with the donor stipulation that the income and investment appreciation be used to maintain the senior center.

-Why is the $700,000 no included in change in net assets with donor restrictions for the year, the problem says it was received in the year.

[timmyj]

Does anyone know how to approach this problem from Ninja MCQ? Jeff?

[Ndom1]

Probably just an error. You are correct under the new 2016-14 NFP standard. The answer should be $770k.

[Timothy Lam]

Is the answer to this question $70,000 or $770,000? Wiley is giving me $70,000 as an answer but on Ninja it says the answer is $770,000.

[Mick]

I think based on the facts stated it should be $770,000 because the $700,000 received in the current year is also donor restricted.

REG 55,53
AUD 80
BEC 60
FAR 74, 70

[Mick]

I used Gleim and caught errors in their material because it wasn't update correctly for the accounting standards. It's probably an error on Wiley's part.

REG 55,53
AUD 80
BEC 60
FAR 74, 70

[Author]

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