No. 125 Brgy.

San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

Non-Profit Organization
NUMBER 1

For the first semester of the current year, 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 remissions of P80,000 were allowed to faculty members’
children attending Public University, and scholarship totaling P220,000 were granted to students.
What amount should Public University include in education 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

NUMBER 2

The following funds were among those held by State College at December 31:

Principal specified by the donor as nonexpendable P 500,000

Principal expendable after five years 300,000
Principal designated from current funds 100,000

What amount should State College classify as regular endowment funds?

a.
100,000
b. 300,000
c. 500,000
d. 900,000

1|P a g e RFERRER/RSoriano/PDEJESU/ATang
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

NUMBER 3

On March 1, 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. 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
Nonoperating revenue 100,000
c. Nonexpendable endowment fund 100,000
Endowment fund balance 100,000
d. Memorandum entry only

NUMBER 4

In June, Park Hospital purchased medicines from Jove Pharmaceutical Co. at a cost of P2,000.
However, Jove notified Park that the invoice was being canceled, and the medicines were being
donated to Park. Park should record this donation of medicines as
a. A memorandum entry only.
b. Other operating revenue of P2,000.
c. A P2,000 credit to operating expenses.
d. A P2,000 credit to nonoperating expenses.

NUMBER 5

Under Cura Hospital’s established rate structure, patient service revenues of P9,000,000 would have
earned for the year ended December 31, 2030. However, only P6,750,000 was collected because of
charity allowances of P1,500,000 and discounts of P750,000 to third-party payors. For the year ended
December 31, 2030, what amount should Cura record as patient service revenues?
a. 6,750,000
b. 7,500,000
c. 8,250,000
d. 9,000,000

2|P a g e RFERRER/RSoriano/PDEJESU/ATang
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

NUMBER 6

In 2030, Pyle Hospital received a P250,000 pure endowment grant. Also in 2030, 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

NUMBER 7

Wilson Hospital, a nonprofit hospital affiliated with Wilson College, had the following cash receipts
for the year ended December 31, 2030:

Collections of health care receivables 750,000

Contribution from donor to establish a term endowment 250,000
Tuition 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 2030. On the hospital’s statement of cash flows for the year ended
December 31, 2030, what amount of these cash receipts would be included in the amount reported
for net cash provided (used) by operating activities?
a. 880,000
b. 800,000
c. 1,050,000
d. 750,000

3|P a g e RFERRER/RSoriano/PDEJESU/ATang
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

NUMBER 8

Unity fund is a voluntary welfare organization funded by contributions from the general public. During
2030, unrestricted pledges of P100,000 were received, half of which were payable in 2030, with other
half payable in 2031 for use in 2031. It was estimated that 20% of these pledges would be
uncollectible. With respect to the pledges, the amount that should be reported for 2030 as net
contributions, under public support, is
a. 100,000
b. 80,000
c. 50,000
d. 40,000

NUMBER 9

Environs, a community foundation, incurred P10,000 in management and general expenses during
2030. In Environs’ statement of activities for the year ended December 31, 2030, 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.

NUMBER 10

Which of the following is not a characteristic of a split-interest agreement?

a. The period covered may be the remaining life of a designated individual.
b. At the end of the agreement, the remaining assets must be distributed to
the trustee.
c. A split-interest agreement may be revocable.
d. Distributions may be made to beneficiaries during the life of the
agreement.

NUMBER 11

On January 2, 2030, 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 2030 financial statements?
a. 3,000
b. 2,500
c. 2,000
d. 0

4|P a g e RFERRER/RSoriano/PDEJESU/ATang
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

NUMBER 12

Child Care Center, Inc. a not for profit organization, receives revenue from various sources during the
year to support its day care centers. The following cash amounts were received during 2030:

• P2,000 restricted by the donor to be used for meals for the children.
• P1,500 received for subscription to a monthly child care magazine with a fair market value to
subscribers of P1,000.
• P10,000 to be used only upon completion of a new playroom that was only 50% complete at
December 31, 2030.

What amount should Child Care Centers record as contribution revenue in its 2030 Statement of
Activities?
a. 2,000
b. 2,500
c. 10,000
d. 11,000

5|P a g e RFERRER/RSoriano/PDEJESU/ATang
 No. 125 Brgy. San Sebastian
Lipa City, Batangas, Philippines
Mobile : 0927 283 8234
Telephone : (043) 723 8412
Gmail : [email protected]

NUMBER 13. Statement of activities:

Psalm, an NPO, had the following expenditure during the year: Administrative salaries 60,000 Work to
help elderly citizens 200,000 Fund raising costs 30,000 Childcare services provided for indigent families
120,000 Required: Classify each item between program services and support services.

NUMBER 14. Statements of Cash Flows.

The following transactions were noted by the Accountant of an NPO:

a. Received unrestricted contributions amounting to P60,000.

b. The NPO incurred P650,000 from fundraising activities to support the current operations.

c. Received a donation of P150,000 with stipulation that the amount can be used based on the
purpose identified by the NPO’s governing body.

d. Received a cash dividend restricted for the acquisition of equipment. The amount of the dividend
received, and the actual acquisition of equipment is P150,000.

e. Received P500,000 from a donor who stipulated that this amount should be invested indefinitely
and only the income there from may be used by the organization.

Required: How much should be reported as cash flows from operating, investing, and financing
activities in the statement of cash flows.

6|P a g e RFERRER/RSoriano/PDEJESU/ATang