Exercise 6 (LO 10) VHWO, journal entries. Record the following events of Chemica
ID: 2517838 • Letter: E
Question
Exercise 6 (LO 10) VHWO, journal entries. Record the following events of Chemical Dependency Clinic, a VHWO: 1. Membership dues of $9,000 were collected 2. Cash contributions of $22,000 and pledges for $32,000 were received. 3. It is estimated that 10% of the above pledges will prove uncollectible. 4. A fund-raising dinner grossed $12,000 from the sale of 480 tickets. The catered dinner cost $15 each for the 420 people who attended, plus $200 for the rental of the dining room. Pay- ment for these costs was made. 5. A classic car was donated to the organization. The car has an estimated fair value of $75,000. It will be the main attraction of an auction to be held in the next accounting per- iod. The proceeds of the auction are part of the budget for activities in the next period. 6. To expand the services of the clinic, a professional fund-raising group was hired to undertake a 6-month campaign. At the end of the six months, the group submitted the report shown on next page.Explanation / Answer
1) Cash Account DR $9,000
TO MemeberShip Receivables CR $9,000
( Being the cash Collected on A/c of Membership Dues)
2) Cash A/c Dr. $22,000
Pledges Receivables A/c Dr 32,000
To ProceedsA/c Cr $54,000
(Being total Proceeds of $54K, received in Cash and Pledges)
3) Provision for uncollectible pledges Dr $ 3,200
Pledges Receivables Cr $ 3,200
( Being provision for uncollectable pledges @ 10%)
4) Dinner Costs DR.$ 6,500
To Cash A/c CR $ 6,500
( Being the cost of dinner for 420 guests and charges for dinner room)
5) Car A/c Dr. $ 75,000
To Donations Received A/c $ 75,000
( Being the car valuing $ 75,000 donated to the Clinic)
6) Cash A/c Dr 70,000
To Proceeds A/c Cr 70,000
(Being the proceeds for 6 month period)
Pledges Receivable Dr $ 30,000
To Proceeds A/c Cr $ 30,000
( Being the Pledges Received for the 6 month period)
Provision for uncollectible pledges Dr $ 1,500
Pledges Receivables Cr $ 1,500
( Being provision for uncollectable pledges @ 5%)
Fund Raising Fee Dr. $ 20,000
To Cash A/c Cr $ 20,000
( Being Collection Drive Fee paid for the 6 month period)