Statement of Activities. (LO14-3) The Atkins Museum recently hired a new controller. He was considered well qualified fo

[answerhappygod]

Statement of Activities. (LO14-3) The Atkins
Museum recently hired a new controller. He was considered well
qualified for the position given his experience with managerial
accounting and his strong communication skills. The new controller
sent each member of the Board of Trustees’ Finance Committee a set
of the financial statements for their review one week before the
monthly meeting. The set included the following statement of
activities.
Other information: The management and general
expenses are first allocated to the programs to which they directly
relate; for example, the executive director’s salary is allocated
to the Public Exhibit Program according to the percentage of time
spent working on the program. Remaining unallocated management and
general expenses are allocated to the programs as indirect costs
based on the relative amount of salaries and wages to total
salaries and wages for the programs.
Required
As a member of The Atkins Museum’s Board of Directors Finance
Committee, review this statement and answer the following
questions:
1. Is the statement in proper form according to FASB
standards?
2. The Atkins Museum would like to open an Impressionists
exhibit. If its operating expenses are expected to be similar to
those of the Abstract Exhibit, how much should the organization
solicit in contributions or grants to cover the full cost of the
program?
3. If you were a potential contributor to the Atkins Museum, do
you think you have enough information from this statement on which
to base your decision?
4. What questions might you ask the controller about this
statement and the museum?
5. Prepare journal entries and financial statements in
accordance with the generally accepted accounting principles
governing NFP organizations.
The not-for-profit sector is a very large and diverse sector of
the US economy. The compassion and generosity of individuals supply
the not-for-profit sector with tremendous amounts of resources. The
amount of resources, combined with the opportunity for unscrupulous
fund-raisers and illegal scams, means the not-for-profit
organizations (NFPs) need to be held accountable for how
contributions are used. In addressing the issue of the
accountability of NFPs, it is important to understand the financial
reporting requirements for NFPs. Therefore, this chapter identifies
the bodies responsible for setting accounting and financial
standards for NFPs, explains the financial and reporting
requirements for NFPs, and illustrates the preparation of financial
statements in accordance with generally accepted accounting
principles (GAAP).