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Local Services, a Voluntary Health and Welfare Organization Had the Following

question 92

Multiple Choice

Local Services, a voluntary health and welfare organization had the following classes of net assets on July 1, 20X8, the beginning of its fiscal year:
During the year ended June 30, 20X9, the following events occurred:
(1) It purchased equipment, costing $100,000, with contributions restricted for this purpose. The contributions had been received from donors during June of 20X8.
(2) It received $130,000 of cash donations which were restricted for research activities. During the year ended June 30, 20X9, $90,000 of the contributions were expended on research.
(3) It sold investments classified in the permanently restricted class for a loss of $40,000. Dividends and interest income earned on the investments amounted to $70,000. There were no restrictions on how investment income was to be used.
(4) It received cash contributions of $200,000 from donors who did not place either time or use restrictions upon their donations.
(5) Expenses, excluding depreciation expense, for program services and supporting services incurred during the year ended June 30, 20X9, amounted to $260,000.
(6) Depreciation expense for the year ended June 30, 20X9, was $80,000.

-Refer to the above information.Which of the following statements is (are) correct about the program and supporting expenses that would be reported on the statement of activities for the year ended June 30,20X9?
I.Program and supporting expenses should be reported at $340,000.
II.All of the program and supporting expenses should be reported as a deduction from unrestricted revenues and other support.

Definitions:

Bond Of Trust

A foundational relationship built on reliability, integrity, and confidence between individuals or within a group.

Gossip

Informal or idle talk about others, typically involving details that are not confirmed as being true.

Grapevine

An informal communication channel within an organization, where information is spread through personal contacts and conversations rather than through official means.

Power And Influence

The capacity or ability of a person or group to direct or affect the behavior of others or the course of events.