The Following Events Are for South City Shelter, a Voluntary

question 46

Essay

The following events are for South City Shelter, a voluntary health and welfare organization that provides emergency shelter and health care for the homeless, as well as educational programs:
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a.A fund-raising program for a portable medical clinic yielded cash contributions of $50,000 and pledges of $100,000.In the past, 5% of pledges have been shown to be uncollectible.​
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b.A note for $100,000 was signed to finance the remaining cost of the clinic.​
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c.The mobile clinic and support materials were purchased for $240,000.​
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d.A note payment of $5,000 and $1,500 in interest was paid for the note in part (c).​
Required:
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Record the necessary journal entries.

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Definitions:

Availability Delay

A period where funds or resources are not immediately accessible or ready for use, often due to processing or logistical reasons.

Total Float

The maximum duration a project task can be postponed without impacting the overall project finish date.

Precautionary Motive

The desire to hold cash or liquid assets to safeguard against future uncertainties and unplanned expenses.

Speculative Motive

The intention to hold cash for the purpose of taking advantage of future opportunities that may arise, such as bargain purchases or earning profits from price changes.