1.

Psalm Hospital, a private nonprofit hospital, earned P500,000 revenues from its gift shop located at the
lobby and spent P100,000 on research during the year ended December 31, 2020. The P100,000 spent on
research was part of a P150,000 contribution received during December 2018 from a donor who stipulated that
the donation be used for medical research. None of the gift shop revenues were spent in 2020. What was the
increase in unrestricted net assets from the events that occurred during 2020? P500,000

2. AAA Hospital, a nonprofit hospital affiliated with a private university, reported the following:
Cash contributions received from donors for acquisition of computer equipment P300,000
Proceeds from sales of hospital gift shop and snack bar 150,000
Dividend income not restricted by donor 50,000
What amount should be reported as “other revenues and gains” in the statement of activities? P200,000

3. Rev University, a nonprofit university assessed its students P600,000 for tuition and miscellaneous fees for
the 2020 summer session. The net amount realized was only P580,000 because of the following reductions:
Tuition remissions granted to faculty member families 6,000
Class cancelation refunds 14,000
How much unrestricted current fund revenues from tuition and miscellaneous fees should Rev University report
for the period? P586,000

4. The following expenditures were incurred by a nonprofit botanical society:

Printing of annual report 25,000
Unsolicited merchandise sent to encourage contributions 50,000
What amount should be classified as fund-raising costs in the society’s activity statement? P50,000

5.The following funds were among those held by URS at December 31, 2020:
Principal Specified by the Donor as Non-expendable 1,250,000
Principal expendable after the year 2020 750,000
Principal designated from current funds 250,000
What amount should be classified as regular endowment funds? P1,250,000

6. In 2020, the board of trustees of TCMC Private University designated P250,000 from its current funds for
college scholarships. Also in 2020, the university received a bequest of P500,000 from an estate of a
benefactor who specified that the bequest was to be used for hiring teachers to tutor handicapped students.
None of the bequest has been spent. What amount should be accounted as restricted net assets? P500,000

7. In April 2020, Ruth donated P250,000 cash to her church, with the stipulation that the income generated
from this gift is to be paid to Claire during her lifetime. The conditions of this donation are that, after Ruth dies,
the principal can be used by the church for any purpose voted on by the church elders. The church received
interest of P20,000 on the P250,000 for the year ended March 31, 2021 and the interest was remitted to Ruth.
In the church’s March 2021 financial statements C
a. P20,000 should be reported under support and revenue in the activity statement
b. P230,000 should be reported under support and revenue in the activity statement
c. P250,000 should be reported as deferred support on the balance sheet
d. The gift and its terms should be disclosed only in notes to the financial statements

8. Rizza Foundation, a non profit organization received the following cash contributions during the year to
support its child care center:
a. P50,000 restricted by the donor to be used for meals of children
b. P37,500 received by the subscriptions to a monthly child care magazine with a fair value to subscribe of
P25,000
c. P25,000 to be used only upon completion of a new playroom that was 75% complete at current year-end.
What amount should be recorded as contribution revenue in the current year? P62,500

9. In the first year of operations of a nonprofit organization, the following transaction occurred:
 The nonprofit organization received P1,000,000 fund from a donor who stipulated that it shall be invested
indefinitely and the dividend from such investment shall be used for research project of the organization.
Dividend amounting to P150,000 was received during the year but only P50,000 was spent for the research
project.
 The nonprofit organization received P300,000 fund from a donor who stipulated that it shall be used for the
acquisition of service car. The nonprofit organization used P100,000 of the fund for the acquisition of a
service car with useful life of 5 years. The car was acquired at the middle of the year.
 The nonprofit organization received P500,000 fund who stipulated that it shall be based on the discretion of
the Board of Trustees of the nonprofit organization. The NPO used P100,000 for the acquisition of souvenir
items which were sold by the nonprofit organization for P150,000. The remaining P400,000 was designated
by the BOT for future fundraising projects.
a. What is the amount of permanently restricted net assets at the end of the first year? P1,000,000
b. What is the amount of temporarily restricted net assets at the end of the year? P300,000
c. What is the amount of unrestricted net assets at the end of the year? P640,000

10. An organization of high school senior performs services for patients at Morong Doctors Hospital. These
students are volunteers and perform services that the hospital would not otherwise provide, such as wheeling
patients in the park and reading to patients. Morong Doctors has no employer-employee relationship with these
volunteers, who donated 500 hours of service. At the minimum wage rate, these services would amount to
P46,875, while it is estimated that the fair market value of these services was P62,500. In Hospital’s statement
of revenues and expenses, what amount should be reported as nonoperating revenue? P0 (Zero)

1. The following receipts were among those recorded by Jonson College, a non-profit organization, during the
current year:
Unrestricted Gifts 1,250,000
Restricted Current Funds (Expended for Current Operating purposes) 500,000
Restricted Current Funds (Not yet expended) 250,000
What amount should be included as revenues and current fund revenues, respectively? P2,000,000;
P1,750,000

2. On December 30, 2020, Barbarian, a non-profit organization received a P17,500,000 donation of Goblin
shares with donor stipulated requirements as follows:
 Shares valued at P12,500,000 are to be sold with the proceeds used to construct a public viewing building.
 Shares valued at P5,000,000 are to be retained with P100,000 dividend used to support current operations.
How much should the Barbarian report as temporarily restricted net assets in the 2020 statement of financial
position? TR-P12,500,000; PR-P5,000,000; UN-Zero (+100,000 -100,000)

3. Dr. Tan Hospital, nonprofit hospital affiliated with a religious group, reported the following information for the
year ended December 31, 2020:
Gross patient service revenue at full rates 1,960,000
Bad Debts expenses 20,000
Contractual Adjustment, VAT 178,180
Allowance for discounts to hospital employees 30,000
In Dr. Tan Hospital’s statement of activities for the year ended December 31, 2020, what amount should be
reported as patient service revenue? P1,960,000

4. Trisha Hospital, a nonprofit hospital, had the following cash receipts for 2020:
Patient service revenue 600,000 - O
Gift shop revenue 50,000 - O
Interest income restricted by donor for the acquisition of computer equipment 100,000 - F
As a result of these cash receipts, the hospital’s statement of cash flows for 2020 would report an increase in
operating activities in operating activities of what amount? P650,000

5. A nonprofit organization had the following cash contributions and expenditures in 2020
Unrestricted cash contributions 1,000,000
Restricted cash contributions for the acquisition of property 400,000
Cash expenditures to acquire property 400,000
The statement of cash flows should include which of the following amounts?
Operating 1,000,000; Investing (400,000); Financing 400,000

6. On January 1, 2020, a nonprofit organization received P1,000,000 cash donation from a donor who
stipulated that the amount should be invested indefinitely in revenue producing investment. The deed of
donation also provided that the dividend income shall be used for the acquisition of computers of the NPO.
On December 31, 2020, the NPO received P100,000 cash as dividend income from the investment of the fund.

On January 1, 2021, the NPO acquired a computer at a cost of P20,000 with a useful life of 5 years without
residual value.

6.1. In the statement of activities of the NPO for the year ended December 31, 2020, which of the following is
the proper effect of the transactions? A
a. Increase in temporarily restricted net assets by P100,000
b. Increase in unrestricted net assets by P1,000,000
c. Increase in unrestricted net assets by P16,000
d. Decrease in temporarily restricted net assets by P20,000

6.2 In the statement of activities of the NPO for the year ended December 31, 2021, which of the following is
the proper effect of the transactions? C
a. Increase in temporarily restricted net assets by P100,000
b. Increase in unrestricted net assets by P1,000,000
c. Increase in unrestricted net assets by P16,000
d. Decrease in temporarily restricted net assets by P100,000

6.3 How should the cash flows be reported in NPO’s statement of cash flows for the year ended December 31,
2020? B
a. Cash receipts from operating activities by P100,000
b. Cash receipts from financing activities by P1,100,000
c. Cash disbursements for investing activities by P50,000
d. Cash disbursements for financing activities by P1,000,000

6.4 How should the cash flows be reported in NPO’s statement of cash flows for the year ended December 31,
2021? C
a. Cash receipts from operating activities by P100,000.
b. Cash receipts from financing activities by P1,100,000
c. Cash disbursements for investing activities by P20,000
d. Cash disbursements for investing activities by P100,000