Exercise 1-3A Identifying the reporting entities
Karen White helped organize a charity fund to help cover the medical expenses of her friend, Vicky Hill, who was seriously injured in a bicycle accident. The fund was named the Vicky Hill Recovery Fund (VHRF). Karen contributed $1,000 of her own money to the fund. The $1,000 was paid to WKUX, a local radio station that designed and played an advertising campaign to educate the public about Vicky’s predicament. The campaign resulted in the collection of $20,000 cash, and VHRF paid $12,000 to Mercy Hospital to cover Vicky’s outstanding hospital cost. The remaining $8,000 was donated to the National Cyclist Fund.
Required
Identify the entities mentioned in the scenario and explain what happened to the cash accounts of each entity you identify.
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Survey Of Accounting
- QUESTION TWO Which of the following is NOT the role of zakah as a social security instrument. A ) The state government appoints Kasim to distribute zakat to the people affected by the flood living in his village. B ) Fatimah received capital assistance to start a chips business as part of the zakat center's efforts to improve her standard of living out of poverty. C ) Due to COVID-19 for the last two years, Ahmad has lost his job and now selling scrap metal for a living. However, he is only able to earn RM15 per day. D ) Zaki has made a financing with a bank to run a business. Total of the financing is RM1 million. Suddenly, his business fails. Now he is trying to repay the financing and it is really hard as he has no other income.arrow_forwardTrust Fund Worksheet Background An inter vivos trust was created by Isaac Posney. Isaac owned a large department store in Juggins, Utah. Adjacent to the store, Isaac also owned a tract of land that was used as an extra parking lot when the store was having a sale or during the Christmas season. Isaac expected the land to appreciate in value and eventually be sold for an office complex or additional stores. Isaac placed the land into a charitable lead trust, which would hold the land for ten years until Isaac's son would turn 21. At that time, title would be transferred to the son. The store will pay rent to use the land during the interim. The income generated each year from this usage will be given to a local church. The land was currently valued at $416,000. During the first year of this arrangement, the trustee recorded the following cash transactions: Cash inflow: Rental income $78,000 Cash outflows: Insurance $ 5,200 Property taxes 7,800…arrow_forwardKaren Meyer owns and operates Crystal Cleaning Company. Recently, Meyer withdrew $10,000 from Crystal Cleaning, and she contributed $6,000, in her name, to the American Red Cross. The contribution of the $6,000 should be recorded on the accounting records of which of the following entities? Crystal Cleaning and the American Red Cross Karen Meyer's personal records and the American Red Cross Karen Meyer's personal records and Crystal Cleaning Karen Meyer's personal records, Crystal Cleaning, and the American Red Crossarrow_forward
- o $275 Cash contributions to the Red Cross o $200 Fair market value of clothing in good condition donated to the Salvation Army (Helen purchased the clothing for o $7,300 Mortgage interest o $2,300 Real estate tax o $150 Homeowners association fees o $3,000 Gambling losses 12. What amount of gambling losses is Helen eligible to claim as a deduction on her Schedule A? a. $0 b. $1,000 $2,000 O d. $3,000arrow_forwardA donor gave $75,000 to a nongovernmental, not-for-profit charity with instructions that s be transferred to Sam Smith, an individual who lost his home in a fire. The not-for-profit w A) A. Record the $75,000 cash and credit revenue with donor restrictions. B) B. Record the $75,000 cash and credit a liability. C) C. Not record the transaction, because the money is going directly to the intended D) D. Do either of the choice A or B, depending upon the policy of the not-for-profit.arrow_forwardQUESTION 9 Joanne is a very generous person and in the current year she donated the following items to deductible gift recipients (DGR's) endorsed by the Commissioner of Taxation under Division 30 of the ITAA (1997). On 4 December 2021, she donated trading stock costing $500 when purchased for her retail business on 10 October 2021. The stock had a market value of $600 on the day it was donated. On 23 January 2022, she donated a painting which she had purchased on 13 November 2015 for $1,700. The painting had a market value at the time of donation of $2,300 (as valued by the Australian Valuation Office). On 5 June 2022, Joanne also donated cash of $300. The amount that Joanne can claim as a deduction for the year ended 30 June 2022 under Section 30-15 of the ITAA (1997) is: (a) $800; (b) $900; (c) $2,600; (d) $3,200. QUESTION 10 Nicholas owns and operates his own furniture store. Recently he donated a table from his stock to a deductible gift recipient (DGR). The table was new and in…arrow_forward
- Charity Navigator (https://www.charitynavigator.org) is a website dedicated to providing information regarding not-for-profit charitable organizations. A. After reviewing the website, explain how not-for-profit organizations are rated. B. Explain why there is a need for the type of information provided by Charity Navigator. C. Choose one to two charities listed in the website. Explain the information provided about the charity (financial and nonfinancial), the rating of the charity, and any other relevant factors.arrow_forwardQUESTION 12 While driving Mohamed's car Sarah accidentally crashed and hit a house, the loss costs a total of 2,303. If in this case Mohamed's insurance policy acted as the primary with a limit of 915, while Sarah's policy acts as the excess and has a limit of 4,571. In this case how much will Sarah's insurance policy pay?arrow_forwardAssume that Charity A and Charity B are alike in every way except as described below. Assume that each of these questions is independent from all other questions.a. Each charity suffers significant damage from a hail storm this year. Each hires a person to repair the damage. Each of these workers donates the labor to the charity. Charity A looks at the repair work and believes it required a specialized skill that it would have had to buy. Charity B looks at the repair work and decides that it did not require a specialized skill. After the recording, which entity will report the largest amount of unrestricted net assets?b. Each charity receives a large investment in shares of a publicly traded company. The investment must be held forever. Charity A can spend the resulting income as it sees fit. Charity B must spend the resulting income to supplement salaries. Both charities receive the same amount of income this year. Both charities immediately spend the income to supplement salaries.…arrow_forward
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