The Following Are Selected Transactions for HELP-ON-US (HOU), an NFPO

question 11

Essay

The following are selected transactions for HELP-ON-US (HOU), an NFPO for 2020. HOU uses the restricted fund method of accounting for contributions. HOU has an operating fund, a capital fund and an endowment fund.
On January 1, the organization purchased fixed assets at a cost of $10,000. The assets were estimated to have a useful life of 5 years with no residual value. Straight-line amortization is used.
Assuming that the assets were purchased from unrestricted contribution that was made on January 1, 2020, prepare the required journal entries for 2020, indicating the fund or funds to be used.
$\begin{array}{|l|r|r|}\hline \text { OperatingFund: } & & \\\hline \text { Cash } & \$ 10,000 & \\\hline \text { Contribution Revenue } & & \$ 10,000 \\\hline \text { Transfer to Capital Fund } & \$ 10,000 & \\\hline \text { Cash } & & \$ 10,000 \\\hline \text { Capital Fund: } & & \\\hline \text { Cash } & \$ 10,000 & \\\hline \text { Transfer from Operating Fund } & & \$ 10,000 \\\hline \text { Equipment } & \$ 10,000 & \\\hline \text { Cash } & & \$ 10,000 \\\hline \text { Amortization Expense } & \$ 2,000 & \\\hline \text { Accumulated Amortization } & & \$ 2,000 \\\hline\end{array}$

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Definitions:

Cognitive-Behavioral Therapy

A psychotherapeutic treatment that helps patients understand the thoughts and feelings that influence behaviors, aimed at changing negative patterns.

Psychoanalysis

Psychoanalysis is a set of psychological theories and therapeutic techniques related to the study of the unconscious mind, originally developed by Sigmund Freud.

Free Association

A psychoanalytic technique in which a patient speaks freely about thoughts, images, and sensations to explore unconscious processes.

Systematic Desensitization

A therapy method that gradually exposes a person to an anxiety-producing object or situation while teaching relaxation techniques.