CPA REVIEW SCHOOL OF THE PHILIPPINES MANILA PRACTICAL ACCOUNTING PROBLEMS 1! BATCH 76 GUERRERO/GERMAN/LIM/SIY/FERRER/DELA CRUZ NON-PROFIT ORGANIZATION The Cure, a Not for Profit Hospital, reported the following information for the year ended December 31, 2014: Revenue from pharmacy/drugstore P 750,000 Go% Amounts charged/billed to patients 2,400,000~ Bad debts expense 10,000 her 1" Revenue from gift shop and cafeteria 410,000 Contractual adjustments — PhilHealth/Medicare (200,000 Cher Unrestricted gifts 25,000 | Charity care - io need fo 150,000" | Allowance for discounts to hospital employees (90,000) Salary Expense ~ medical staff Net patient service revenues for The Cure Hospital for the year ended December 31, 2014 is 3,270,000 2,110,000 P1,960,000 3,120,000 poe " The Healing Hospital had the following cash receipts and disbursements for the year ended December 31, 2014: Collections of Receivables P500,000 UR Contribution restricted by the donor to the acquisition of medical supplies 70,000 18- F Contribution for an establishment of quasi endowment 100,000 URC Contribution restricted by donor to the acquisition of furniture and fixtures 90,000 18 Tuition from nursing school 200,000 uR-2 Interest received from investment in 35,000 TK f regular endowments Contribution for an establishment of term endowment 90,000 TR Payment of supporting expenses (450,000.12 © Payment for the acquisition of furniture and fixtures related to the restricted donation above. 60,000 Payment of program expenses _ 215,000 ur-o ‘The interest received from regular endowment is restricted by the dorior for acquisition of medical equipment PAL- Fe /2A ier_readmi fedasffy—B1G5,000.t0 several faculty members in accordance » ' UR How much is the net cash provided by operating activities? ‘A. 335,000 | B. P375,000 . P410,000 D. 435,000 mM Learning College, a private not-for-profit college received P180,000 from Ms. GV on May 25, (2014. Ms. GV stipulated that her contribution be used to support faculty continuing TR ‘education program during the fiscal year beginning on July 1, 2014. On July 15, 2014, ators of Learning College awarded scholarship and training grants totaling the wishes of Ms. GV. For the year ended June 39,2014, Learning College should report the P180,000 contribution as aah ‘A. Temporarily restricted revenues on the statement of activities i B. Unrestricted revenue on the statement of activities C. Temporarily restricted deferred revenue on the statement of activities D. An increase in fund balance on the statement of financial position v Knowledge University, a private not-for-profit university, had the following cash inflows during the year ended June 30, 2014: UR-O |. P800,000 from students for tuition. pR-F I & rom a donor who stipulated that the money be invested Indefintey 8-0 Ill. P280,000 from a donor who stipulated that the money be spent in accordance with the wishes of Knowledge University’s governing board. On Knowledge University’s statement of cash flows for the year ended wd 30, 2014, what amount of these cash flows should be reported as financing activities? ‘A. P280,000 B. P730,000 . 1,080,000 D, P450,000 v Safari Life, a private not-for-profit zoological society, received contributions restricted for research totaling P175,000 in 2012. None of the contributions were spent on research in 2012. In 2013, P122,500 of the contributions were used to support the research activities of the society. The sffect on the statement of activities for the year ended DecembeF 31, 2013, for Safari Life would be a TR if UR the questiin ur — 300 ‘A. P52,500 increase in temporarily restricted revenue. B. P122,500 decrease in temporarily restricted revenue. C. P122,500 increase in temporarily restricted net assets. D. P122,500 decrease in unrestricted revenue. pag F6le boivl D Which of the following is most likely to be classified as, other operating revenue? A. Unrestricted gift B. State research grant C. Dividend income D. Parking fee vil Wisdom College, a private not-for-profit college, received the following contributions during 2014: TR |. 1,250,000 from alumni foundation for renovation of the gymnasium in 2015. PR _Il._ P250,000 from a donor who stipulated that the contribution be invested indefinitely and that the earnings be used for spiritual activities. As of December 31, 2014, ‘earnings from investment amounted to P12,500. +R For the year ended December 31, 2014, what amount of these contributions should be D reported as restricted revenues on the statement of activities? ‘A. P12,500 B. 1,262,500 . 1,250,000 D. P1,512,500 8. Which of the following statements is true? A. Contributed services and facilities are recognized both as asset and contributions revenue, net of expense. B. Financial statements of not for profit organization, focuses on distinctions between current and non-current fund. C. Unconditional pledges are recognized as receivables and contributions revenue when collected. D. The required financial statements for nonprofit organizations include: statement of financial position, statement of cash flows, statement of activities and specifically for Voluntary Health and Welfare Organizations ~ Statement of Functional Expenses. = > 9. Which of the following statements is true? p Revere, A. An endowment fund is used to account for assets held by a nonprofit ‘organization as a custodian. The assets are disbursed only as instructed by their owner. Aepe B. in the statement of financial_positioi, the balances of the Contractual ‘Adjustments account and the Expenditures- Student Aid account are to be deducted from the total service revenues to compute the net service revenue for the month. C. Contributions of cash and other assets are recognized when received and credited to contributions revenue whether restricted or unrestricted. D. Statement of Financial Position shows assets and liabilities similar to commercial accounting. Net assets are classified into: unrestricted fund which has no donor imposed restrictions ; temporarlly restricted fund which has donor imposed ulations and permanently restricted fund with donor imposed restrictions at 2iianiee and can be removed by non-profit organization activity. PAL-7el2 th