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NON-PROFIT ORGANIZATION

Unity fund is a welfare organization funded by contributions from the general public. During 2009, unrestricted
pledges of P100,000 were received, half of which payable in 2009, with other half payable in 2010 for use in
2010. It was estimated that 20% of these pledges would be uncollectible.
1. With respect to the pledges, the amount that should be reported for 2009 as net contributions, under public
support, is
a. 100,000 b. 80,000 c. 50,000 d. 40,000
On December 30, 2010, a not-for-profit organization received a P7,000,000 donation of Day Care Co. shares
with donor stipulated requirements as follows:
 Shares valued at P5,000,000 are to be sold with the proceeds used to construct a public
viewing building.
 Shares valued at P2,000,000 are to be retained with the dividend used to support current
operations.
2. As a consequence of the receipt of these shares, how much should the not-for-profit organization report as
temporarily restricted net assets on its 2010 statement of financial position?
a. 0 b. 2,000,000 c. 5,000,000 d. 7,000,000

University, a private for not-for-profit university, had the following cash inflows during the year ended:
 P500,000 from students for tuition fees.
 P300,000 from a donor who stipulated that the money be invested indefinitely.
 P100,000 from a donor who stipulated that the money be spent in accordance with the wishes
of Berkeley’s governing board.
3. On Berkeley’s statement of cash flows for the year ended June 30, 2013, what amount of these cash flows
should be reported as operating activities?
a. 900,000 b. 400,000 c. 800,000 d. 600,000

Wilson Hospital, nonprofit hospital affiliated with Wilson College, had the following cash receipts for the year
ended December 31, 2013:
Collections of health care receivables 750,000
Contributions from donor to establish a term endowment 250,000
Tuition fee from nursing school 50,000
Dividends received from investment in permanent endowment 80,000
The dividends received are restricted by the donor for hospital building improvements. No improvements were
made during 2013.
4. On the hospital’s statement of cash flows for the year ended December 31, 2013, what amount of these cash
receipts would be included in the amount reported for the net cash provided (used) by operating activities?
a. 880,000 b. 800,000 c. 1,050,000 d. 750,000

The League, a not-for-profit organization, received the following pledges:

Unrestricted P200,000
Restricted for Capital additions 150,000
All pledges are legally enforceable; however, the League’s experience indicates that 10% of all pledges prove to
be uncollectible.
5. What amount should the League report as pledges receivable net of any allowance account?
a. 135,000 b. 180,000 c. 315,000 d. 350,000

Under Cura Hospital’s established rate structure, patient service revenues of P9,000,000 would have earned
for the year ended December 31, 2009. However, only P6,750,000 to third-party payors.
6. For the year ended December 31, 2009, what amount should Cura record as patient service revenues?
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a. 6,750,000 b. 7,500,000 c. 8,250,000 d. 9.000,000

The following expenditures were among those incurred by a nonprofit botanical society during 2009:
Printing of annual report P 10,000
Unsolicited merchandise sent to encourage contributions P 20,000
7. What amount should be classified as fund-raising cost in the society’s activity statement?
a. 0 b. 10,000 c. 20,000 d. 30,000

In April 2008, Alice Reed donated P100,000 cash to her church, with the stipulation that the income generated
from this gift is to be paid to Alice during her lifetime. The conditions of this donation are that, after Alice dies,
the principal can be used by the church for any purpose voted on by the church elders.
8. The church received interest of P8,000 on the P100,000 for the year ended March 31, 2009 and the interest
was remitted to Alice. In the church’s March 31, 2009 financial statements
a. P8,000 should be reported under support and revenue in the activity statement.
b. P92,000 should be reported under support and revenue in the activity statement
c. P100,000 should be reported as deferred support in the balance sheet.
d. The gift and its terms should be disclosed only in notes to the financial statements.
In 2009 Wells Hospital received an unrestricted bequest of common stock with fair market value of P50,000 on
the date of receipt of the stock. The testator had paid P20,000 for this stock in 2007.
9. Wells should record this bequest as
a. Non-operating revenue of P50,000.
b. Non-operating revenue of Operating P30,000
c. Non-operating revenue of P20,000
d. A memorandum entry only.

An organization of high school seniors performs services for patients at Leer Hospital. These are volunteers and
perform services that the hospital would not otherwise provide, such as wheeling patients in the park and
reading to patients. Leer has no employer-employee relationship with these volunteers, who donated 5,000
hours of service to Leer in 2009. At the minimum wage rate, these services would amount to P18,750, while it
is estimated that the fair market value of these services was P25,000.
10. In Leer’s statement of revenues and expenses, what amount should be reported as non-operating revenue?
a. 25,000 b. 18,750 c. 6,250 d. 0

For the first semester of 2009, Public University assessed its students P4,000,000 (net of refunds), covering
tuition and fees for educational and general purposes. However only P3,700,000 was expected to be realized
because tuition remission of P80,000 were allowed to faculty members’ children attending Public University,
and scholarship totaling P220,000 were granted to students.
11. What amount should Public University include in educational and general current funds revenues from student
tuition and fees?
a. 4,000,000 b.3,920,000 c.3,780,000 d.3,700,000

Public College’s unrestricted current fund comprised the following:

Assets P 5,000,000
Liabilities (including deferred revenues of P 100,000) 3,000,000
12. What is the fund balance of Public College’s unrestricted current fund?
a. 1,900,000 b. 2,000,000 c. 2,100,000 d. 5,000,000

On July 31, 2013, Sabio Public College showed the following amount to be used.
Renewable and replacement of college properties P 200,000
Retirement of indebtedness on college properties 300,000
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Purchase of physical properties for college properties,

but unexpected at July 31, 2013 400,000
13. What total amount should be included in Sabio’s plant funds at July 31, 2013?
a. 900,000 b. 600,000 c. 400,000 d. 200,000
The following information pertains to interest received by Beech Public University from endowment fund
investment for the year ended June 30,2013:
Expended for
Received Current Operations
Unrestricted P 300,000 P 100,000
Restricted 500,000 75,000
14. What amount should be credited to endowment income for the year ended June 30, 2013?
a. 800,000 b. 375,000 c. 175,000 d. 100,000

The following expenditures were among those incurred by Cheviot Public University during 2009:
Administrative data processing P 50,000
Scholarships and fellowships 100,000
Operation and maintenance of physical plant 200,000
15. The amount to be included in the functional classification “Institutional Support” expenditures account is
a. 50,000 b. 150,000 c. 250,000 d. 350,000

The following funds were among those held by State College at December 31, 2009:
Principal specified by the donor as nonexpendable P 500,000
Principal expendable after the year 2018 300,000
Principal designated from current funds 100,000
16. What amount should State College classify as regular endowment funds?
a. 100,000 b. 300,000 c. 500,000 d. 900,000

In 2013, the board of Trustees of Burr Private University designated P 100,000 from its current funds for college
scholarships. Also in 2013, the university received a bequest of P 200,000 from an estate of a benefactor who
specified that the bequest was to be said for hiring teachers to tutor handicapped students.
17. None of the bequest has been spent. What amount should be accounted restricted net assets?
a. 0 b. 100,000 c. 200,000 d. 300,000

On March 1, 2009, A.C. Rowe established a P100,000 endowment fund, the income from which is to be paid to
Elm Hospital for general operating purposes. Elm does not control the fund’s principal. Rowe appointed West
National Bank as trustee of this fund.
18. What journal entry is required by Elm to record the establishment of the endowment?
A. Cash 100,000
Nonexpendable endowment fund 100,000
b. Cash 100,000
Non-operating revenue 100,000
c. Nonexpendable endowment Fund 100,000
Endowment fund balance 100,000
d. Memorandum entry only

Ross Hospital’s accounting records disclosed the following information:

Net sources invested in plant assets P 10,000,000
Board-designated funds 2,000,000
19. What amount should be included as part of unrestricted funds?
a. 12,000,000 b. 10,000,000 c. 2,000,000 d.
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20. In June 2013, Park Hospital purchased medicines from Jove Pharmaceutical Co. at a cost of P 2,000. However,
Jove notified Park that the invoice was being canceled, and the medicines were being donated to Park. Park
should record this donation as
a. A memorandum of entry only.
b. Other operating revenue of P2,000
c. A P2,000 credit to operating expenses.
d. A P2,000 credit to non-operating expenses.

Cedar Hospital has a marketable equity securities portfolio that is appropriately included in the noncurrent
assets in unrestricted funds. The portfolio has an aggregate cost of P300,000. It had an aggregate fair market
value of P250,000 at the end of 2013 and P290,000 at the end of 2012.
21. If the portfolio was properly reported in the balance sheet at the end of 2012, the change in the valuation
allowance at the end of 2013 would be
a. P 0. b. A decrease of P40,000. c. An increase of P40,000. d. An increase of P50,000.

22. In 2013, Pyle Hospital received a P 250,000 pure endowment grant. Also in 2013, Pyle’s governing board
designated, for special uses, P300,000 which had originated from unrestricted gifts. What amount of these
resources should be accounted for as part of the unrestricted net asset class?
a. 0 b. 250,000 c. 300,000 d. 550,000

23. Environs, a community foundation, incurred P10,000 in management and general expenses during 2013. In
Environs’ statement of activities for the year ended December 31,2013, the P10,000 should be reported as:
a. A direct reduction of unrestricted net assets.
b. Part of supporting services expenses.
c. Part of program services expenses.
d. A contra-account to offset revenue and support.

24. On January 2, 2013, a nonprofit botanical society received a gift of an exhaustible fixed asset with an estimated
useful life of 10 years and no salvage value. The donor’s cost of this asset was P20,000 and its fair market value
at the date of the gift was P30,000. What amount of depreciation of this asset should the society recognize in
its 2013 financial statements?
a. 3,000 b. 2,500 c. 2,000 d. 0

The Baguio Foundation, a not-for-profit organization had the following contributions and expenditures for 2010:
 Unrestricted cash contributions of P500,000
 Cash contributions of P200,000 restricted by the donor to the acquisition of property.
 Cash expenditures of P200,000 to acquire property with the donation in the above item
25. Baguio Foundation’s statement of cash flows should include which of the following amounts for operating,
investing, and financing activities respectively?
a. 500,000 (200,000) 200,000
b. 500,000 0 0
c. 700,000 (200,000) 0
d. 0 500,000 200,000