The Chessie Foundation, a newly established governmental entity, engaged in the following transactions:

1. A donor made a $1,000,000 pledge, giving the foundation a legally enforceable 90-day note for the full amount.

2. The same donor paid $500,000 of the amount pledged.

3. The foundation purchased a building for $900,000, paying $90,000 in cash and giving a ten-year mortgage for the balance. The building has a 25-year useful life. The foundation charges a half-years depreciation for all assets in the year they are acquired.

4. The foundation hired five employees. By year-end, these employees have earned $10,000 in salaries and wages for which they have not been paid.

The foundation accounts for its activities in a single fund.

Prepare journal entries to record the transactions, making the following alternative assumptions as to the funds measurement focus:

Cash only

Cash plus other current financial resources (cash plus short-term receivables less short-term payables)

All economic resources

b. Based on your entries, prepare appropriate operating statements and balance sheets for the organization.

5. The Chessie Foundation, a newly established governmental entity, engaged in the following transactions:

1. A donor made a $1,000,000 pledge, giving the foundation a legally enforceable 90-day note for the full amount.

2. The same donor paid $500,000 of the amount pledged.

3. The foundation purchased a building for $900,000, paying $90,000 in cash and giving a ten-year mortgage for the balance. The building has a 25-year useful life. The foundation charges a half-years depreciation for all assets in the year they are acquired.

4. The foundation hired five employees. By year-end, these employees have earned $10,000 in salaries and wages for which they have not been paid.

The foundation accounts for its activities in a single fund.

a. Prepare journal entries to record the transactions, making the following alternative assumptions as to the funds measurement focus:

Cash only

Cash plus other current financial resources (cash plus short-term receivables less short-term payables)

All economic resources

b. Based on your entries, prepare appropriate operating statements and balance sheets for the organization.