E13.17 Contributions Received on Behalf of Others The United Way receives contributions and distributes them to other...

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Accounting

E13.17 Contributions Received on Behalf of Others
The United Way receives contributions and distributes them toother NFP organizations. Some of its transactions for the currentyear are as follows:
1. Donors contribute $5 million, designated to specificunaffiliated NFP organizations. $3 million of this money isdistributed according to donor wishes during the current year.
2. Donors contribute $2 million, to be distributed tounaffiliated NFP organizations selected by United Way. United Waydistributes $1.8 million of these donations in the currentyear.
3. Donors contribute $1 million, to be distributed to a specificaffiliated organization. United Way distributes $900,000 of thesedonations in the current year.
Required
Prepare journal entries to record the above activities. If theitem affects net assets, identify the category affected.

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4.4 Ratings (659 Votes)

	Particulars		Dr. ($)	Cr ($)
1	Cash A/c		5
		To Revenue A/c		5
	(Being contribution received)

	Revenue A/c		3
		To Cash A/c		3
	(Being distribution of contribution)

2	Cash A/c		2
		To Revenue A/c		2
	(Being contribution received)

	Revenue A/c		1.8
		To Cash A/c		1.8
	(Being distribution of contribution)

3	Cash A/c		1
		To Revenue A/c		1
	(Being contribution received)

	Revenue A/c		0.9
		To Cash A/c		0.9
	(Being distribution of contribution)

Category in case net assets are affected-

- Revenue account is restricted reserve account, hence will be utilized in the manner donor specifies. Therefore, utilized fund in Revenue account will be reflected as a liability in the Balance Sheet which is to be utilized in the future years.

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