Journal entries—Voluntary health and welfare organization
The Good Grubb Food for the Hungry Institute is a nongovernmental not for profit organization that provides free meals for the destitute in a large metropolitan area. Record the following transactions in the accounts of Good Grubb.
1. Cash gifts that were received last year, but designated for use in the current year, totaled $20,000.
2. Unrestricted pledges of $65,000 were received. Five percent of pledges typically prove uncollectible. Additional cash contributions during the year totaled $35,000.
3. Donations of food totaled $150,000. The inventory of food on hand decreased by $1,200 during the year.
4. Expenses were incurred as follows: salary of director, $10,000; facility rental, $8,000; purchases of food, $70,000; and supplies, $27,000. Supplies inventory increased by $5,000 during the year.
5. Restricted pledges of $300,000 were received during the year. The pledges are restricted for use in constructing a new kitchen and dining hall. Of the pledges received, 5% is expected to be uncollectible.