CPA REVIEW SCHOOL OF THE PHILIPPINES MANILA. FINANCIAL ACCO! ‘Ronsonrnontr nowzation © G 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 of 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? py ay —refeaed fam fenprony JNTING AND REPORTING RERO / GERMAN / DE JESUS / LIM / FERRER /LACO / VALIX a. 600,000 Only the PSM, try rescnucr fram gift hop rechicled way recited b. 400,000 ‘norte were spent in 2020 t umermicted c. 500,000) d._ 550,000 2. AAA Hospital, a nonprofit hospital affiliated with a private university, reported the following: Restle Cash contributions received from donors for acquisition of computer equipment 300,000. Unestried [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 revenue and gains” in the statement of activities? a 50,000 P ison b. 150,000 ‘San cc. 200,000 5 To 500,000 tana 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 4duted fo amrive eo utrestrifed Cument fared 14,000 How much unrestricted current fund revenues from tuition and miscellaneous fees should Rev University report for the period? a. 580,000 Pom b.. 586,000 Cyan) cc. 594,000 d. 600,000 Pea, 4. The following expenditures were incurred by a nonprofit botanical society: Printing of annual report @dmin cect vs ‘i 25, 000 Unsolicited merchandise sent to encourage contributions fur: roirng Cort 50,000 What amount should be classified as fund-raising costs in the society's activity statement? a. 0 b. 25, © ‘0000 4. 75,000 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 Pweg. Endowment Fandt Principal Expendable After the Year 2020 "750,000. T0°m Erdownent fut Principal Designated from Current Funds 250,000 Guari-ercewment Rirel ‘What amount should be classified as regular endowment funds? a 250,000 b. 750,000 c d 2,250,000 8721Page 2 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 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 heen spent. What amount should be accounted for as restricted net assets? 0 250,000 500,000. | fempnarily tetrcted 750,000 aese 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 Claire. In the church’s March 31, 2021 financial statements 20,000 should be reported under support and revenue in the activity statement P230,000 should be reported under support and revenue in the activity statement ‘P250,000 should be reported as deferred support in the balance sheet. ‘The gift and its terms should be disclosed only in notes to the financial statements. pesos 8, Rizza Foundation, a non profit organization, received following cash contributions during the year to support its child care center: a, P50,000 restricted by the donor (o be used for meals of children. b, P37,500 received by subscriptions to a monthly child care magazine with a fair value to subscribe of P25,000. (97.57 ~2r.n) = 2.60 c. P25,000 to be used only upon completion of a new playroom that was 75% complete at current year-end. 14/COrdlion regarding if; complehon What amount should be recorded as contribution revenue in current year? a. 50,000 Pm b. 62,500 © [2a c. 25,000 f Bm 27,500 — 9. Im the first year of operations of a nonprofit organization, the following. transactions occurred: + The nonprofit organization received P1,000,000 fund from a donor who stipulated that it shall be invested Cindefiniteip 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 PS0,000 was spent for the research project. [52/1 —[D,em = [1,00 *tenperaniy rete + The nonprofit organization received P300,000 fund from a donor who stipulated that it shall fit.” be used for the acquisition of service car. The nonprofit organization used P100,000 of the =5 ys fand forthe acquisition ofa service ear with useful life of $ years. The car was aequited at Tom ‘ the middle of the year. 7.300, ~[0,M =20,0 femprranly terficted Cia on Gom + ‘The nonprofit organization received P500,000 fund from a donor who stipulated that it shall be used based on the discretion of the Board of Trustees of the nonprofit organization. The nonprofit organization 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 Board of Trustees for future fundraising projects. ¢ >) ¢» Ct.) 5m 8721Page 3 1. What is the amount of permanently restricted net assets at the end of the first year? 1,100,000 1,300,000 1,200,000 1,000,000)? held indefinitely ao oP 2. What is the amount of temporarily restricted net assets at the end of the year? a. 100,000 fan. b. 300,000 © [nny c. 200,000 P20.Mm d. 700,000 = 3. What is the amount of unrestricted net assets at the end of the year? a. 640,000 © 1550, b. 540,000 Pm c. 590,000 : G d. 630,000 Posen 10. An organization of high school seniors 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? a. 62,500 b, 46,875 ce. 15,625 d ay Mo reenve wat recognited sae renter renclered did not require 4 pean Skillc. Therefre ff Is NoF quantifiable. 8721