Case Study: Not-for-Profit Organizations The National Institute for Vocational Education and Imam Malik College both are

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Case Study: Not-for-Profit Organizations
The National Institute for Vocational Education and Imam Malik
College both are offering education on non-profit bases. They
generate fund from donations and charity organizations plus
rendering limited services and consultancy and charge small fees to
cover basic expenditure. Presented below are financial statements
(except cash flows) for two not-for-profit organizations. Neither
organization has any permanently restricted net assets, which are
registered under the names of main donators.
Statement of Activities for the Year Ended December 31,
2019
Imam Malik College
The National Institute for Vocational
Education
Unrestricted
Temporarily
Restricted
Unrestricted
Temporarily
Restricted
Revenues
Program service revenue
2,595,000
1,250,000
Contribution revenues
6,327,500
750,000
4,200,000
Grant revenue
96,000
1,025,000
Net gains on endowment investments
17,500
Net assets released from restriction
Satisfaction of program restrictions
450,000
(450,000)
377,000
(377,000)
Total revenues
9,390,000
396,000
5,827,000
648,000
Expenses
Education program expenses
5,621,000
1,559,000
Research program expense
1,256,000
2,256,000
Total program service expenses
6,877,000
3,815,000
Fund-raising
456,000
356,000
Administration
650,000
1,229,000
Total supporting service expenses
1,106,000
1,585,000
Total expenses
7,983,000
5,400,000
Increase in net assets
1,407,000
396,000
427,000
648,000
Net assets January 1
4,208,000
759,000
1,037,500
320,000
Net assets December 31
5,615,000
1,155,000
1,464,500
968,000
STATEMENT OF NET ASSETS, As At December 31,
2019
Imam Malik College
The National Institute for Vocational
Education
Current assets
Cash
105,000
256,000
Short-term investments
265,000
99,000
Supplies inventories
32,000
150,000
Receivables
239,500
88,500
Total current assets
641,500
593,500
Noncurrent assets
Pledges receivable
465,000
Long-term investments
2,590,000
Land, buildings, and equipment (net)
3,275,000
1,968,000
Total noncurrent assets
6,330,000
1,968,000
Total assets
6,971,500
2,561,500
Current liabilities
Accounts payable
23,000
129,000
Total current liabilities
23,000
129,000
Noncurrent liabilities
Notes payable
178,500
Total noncurrent liabilities
178,500
Total liabilities
201,500
129,000
Required:
If you have been selected to audit both institutions, which
audit report and opinion you will submit for each institution.
Justify your report.