Please enable JavaScript.
Coggle requires JavaScript to display documents.
Chapter 6.5, FAR620081, FAR611139, FAR611203, FAR611189, FAR611225,…
-
FAR620081
-
Program expenses
- $99,000. Program expenses includes all expenses incurred directly for the main program which is community services. When donated materials are distributed to children, both a revenue for the donation and an expense for the distribution is recorded at the fair value of $8,000, which is a program expense. Other expenses directly related to the community service program are Federal youth training fee instructor salary paid of $26,000, Director of community activities salary of $50,000, Space rental (75% for community activities) $15,000, giving a total program expense of $99,000 (i.e. $8,000 + $26,000 +$50,000 + $15,000).
-
FAR611139
A not-for-profit voluntary health and welfare organization should report a contribution for the construction of a new building as cash flows from which of the following in the statement of cash flows?
Financing activities represent the cash flow effects of liability transactions. Inflows include proceeds from loans. Contributions that are permanently restricted or may only be spent on acquisition of assets (construction of a new building) are included as well (restricted for long term purposes).
-
FAR611189
Gross patient service revenue from all services provided at the established billing
rates of the hospital (note that this figure includes charity care of $25,000) - 775,000
Provision for bad debts - 100,000
Difference between established billing
rates and fees negotiated with third-party payors (contractual adjustments) - 70,000
Revenue from charity care is excluded $25,000 and provisions for bad debts in not considered while calculating net patient revenue.
Please see page F6-61. Bad debts is part of Operating expenses and not part of Net Patient Revenue
If the patients are screened before admission , the bad debts are operating expenses and if the patients are not screened before admission, bad debts are reduced from revenue
what is meant by contractual adjustments ?
These are adjustments made with the insurance providers. Because an insurance company is covering a particular hospital, the hospital would give a discount to the bill to these companies. The third party payors here is the insurance company.
Where Revenue relating to charity care is disclosed?
Charity care is not billed at all and hence is not disclosed. Its not a revenue
FAR611225
How should a non-governmental not-for-profit organization classify gains and losses on investments purchased with assets with donor restrictions?
The income generated from assets with donor restrictions may be spent and should be reported in net assets without donor restrictions unless explicitly restricted by donor or law (in which case, would be reported under assets with donor restrictions).
FAR611228
At which of the following amounts should a non-governmental not-for-profit organization report investments in debt securities?
Debt securities are reported at quoted market prices.
NPOs are required to use fair value accounting for most equity and debt Investments and reports investment income (dividends/interest) as well as realized AND unrealized gains/losses on marketable securities directly in the statement of activities.
FAR611249
During the year, Public College received the following:
Contribution revenue will include unconditional pledge of $50,000 and $25,000 restricted for scholarship.
Contribution revenue ($50,000 + $25,000) = $75,000.
Conditional pledge of $10,000 recognized when earned, i.e., conditions are substantially met.
An unrestricted $50,000 pledge to be paid the following year.
A $25,000 cash gift restricted for scholarships.
A notice from a recent graduate that the college is named as a beneficiary of $10,000 in that graduate's will.
-
FAR611252
How should unconditional pledges received by a non-governmental not-for-profit organization that will be collected over more than one year be reported?
Pledges made by donor may be accrued as receivables by the NPO in the period in which they are made. However, the NPO should provide for an appropriate allowance for uncollectible, and treat pledges that are not due to be paid until a future period as restricted by donor restrictions. Pledges are recorded at PV for annuities.
-
-