Exam 26: Not-For-Profit Organizations: Introduction and Private Npos

For a permanent endowment created by a cash donation, endowment investment dividends that can be spent in any manner-but are unspent at year-end-are reported as increases in TR net assets.

Endowment investment gains and losses on specific donated assets that must be held in perpetuity are reported as changes to TR net assets.

_____ Status State University (SSU) has volunteers who (a) regularly provide teaching services to SSU and (b) are paid only nominal amounts to reimburse them for their commuting costs. During 2006, SSU paid $33,000 to these volunteers (retired scientists who teach science courses on a part-time basis). The gross value of services performed by these volunteers amounted to $400,000. What amount should SSU report for contributions revenues in 2006 for these volunteers' services?

Under FAS 116, an implied time restriction on contributed capital assets is assumed to exist in the absence of donor-imposed restrictions.

Under FAS 116, contributions that create term endowments are classified as increasing temporarily restricted net assets.

Contributed works of art, historical treasures, and similar assets are called __________________________________.

Contributed services are recognized if they (a) create or enhance __________________________________________ or (b) require _____________________________________.

Under FAS 116, contributed services are valued using the minimum wage.

A transfer in which value is not received or given in exchange is a(n) ______________________________transfer.

For public C&Us engaged only in business-type activities, the restricted net assets section of the statement of net assets is broken down as to __________________________ and _____________________________.

_____ Sable Private University (SPU) has volunteers who (a) regularly provide teaching services to SPU and (b) are paid only nominal amounts to reimburse them for their commuting costs. During 2006, SPU paid $33,000 to these volunteers (retired scientists who teach science courses on a part-time basis). The gross value of services performed by these volunteers amounted to $400,000. What amount should SPU report for expenses for volunteers' services?

_____ On 5/5/05, a donor contributed an equity security having a $500,000 fair value. The donor stipulated that (a) the NPO may sell the equity security at any time and make other suitable investments, (b) the $500,000 endowment must remain intact in perpetuity, and (c) the income and gains may be spent only on diabetes research (no mention is made regarding the treatment of losses). (No dividends were received in any year.) In early 2006, a portion of the equity security was sold for $30,000 cash. The NPO spent $22,000 cash on diabetes research in 2006. The equity security had a fair value of $530,000 at 12/31/05, $480,000 at 12/31/06, and $555,000 at 12/31/07. What is the change in the various categories of net assets for 2007 as a result of the increase in the equity security's market value in 2007?

Endowment investment gains on specific donated assets that were received this year and must be held for 50 years are reported as increases to UR net assets-if investment income can be spent in any manner.

For public C&Us engaged only in business-type activities, its operating statement consists of the following four categories: (1) _____________________________, (2) ___________________________, (3) _____________________________. and (4) ___________________________.

Restrictions on long-lived assets classified as temporarily restricted net assets ________________ over the life of the assets.

Under FAS 117, the statement of financial position must show total amounts for each classification of net assets.

_____ Volunteers constructed an addition to an existing building owned by a nonprofit organization. The cost of materials was $60,000 (donated by local firms). The value of the labor hours (based on prevailing hourly rates for carpenters and electricians) was $40,000. An outside contractor offered to do the work for $115,000. At the completion of the job, the county property tax assessor assigned a value of $120,000 to the addition. Under FAS 116, how much should be reported in the financial statements for donated services?

The statement of cash flows may be prepared using the ________________ method (the preferred method) or the ______________ method.

Under FAS 116, collection items need not be capitalized under certain circumstances.

Contributions that create ______________ are permanently restricted contributions.