Biology Forums - Study Force

(Accounting for donations and donor-restricted and board-designated resources)

A not-for-profit hospital uses the following funds to account internally for its resources: General Fund (GF); Specific Purpose Funds (SPF); Plant Replacement and Expansion Funds (PREF); and Endowment Funds (EF). The hospital is establishing a special trauma unit for brain-related injuries, and is soliciting contributions for this purpose. It reports donations as revenues, rather than gains, because fund-raising is a significant part of its ongoing activities. Record the following transactions, stating the fund or funds used, and whether unrestricted, temporarily restricted, or permanently restricted net assets are affected.
      a.   Hospital trustees set aside $100,000 for the purpose of training its nurses to deal with patients in the hospital's trauma unit.
      b.   National Products donated trauma equipment having a fair value of $325,000. Also, Stay-Cool Chemical donated drugs having a fair value of $44,000.
      c.   The hospital received cash contributions from local donors, who stipulated that the donations must be used for the following purposes involving the trauma unit:
         (1)   $10,000, to help pay the salary of Dr. Harlan Elliot, noted brain surgeon; and
         (2)   $200,000, to be used solely for the purpose of equipping the trauma unit.
      d.   Dr. Cheryl Fusco was hired. His first month's salary was $25,000. The hospital used the donation received in transaction c(1) to pay part of Dr. Fusco’s salary.
      e.   The hospital purchased $80,000 of special equipment for the trauma unit. Its policy is to use donated funds to acquire equipment before it uses internally-generated funds.
   

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Thanks so much f_zah1.

You were correct :D

You're very welcome!