Each charity receives a large investment in shares of a publicly traded company. The investment must be held forever. Charity A can spend the resulting income as it sees fit. Charity B must spend the resulting income to supplement salaries. Both charities receive the same amount of income this year, and both immediately spend the entire income to supplement salaries. Complete the matching below for the accounting by the charities for the donated shares. Overall effect of the two charities' accounting DR salary expense and CR net assets - with donor restrictions (reclassified when spent to net assets without donor restrictions)
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They record the donation as follows: - Debit: Investment in shares (asset account) - Credit: Net assets with donor restrictions (equity account) Show more…
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Following are four independent transactions or events that relate to a local government and a voluntary health and welfare organization: 1. Made a disbursement of $25,000 from the general fund unrestricted assets for the cash purchase of new equipment. 2. Received an unrestricted cash gift of $100,000 from a donor. 3. Sold investments in common stocks with a total carrying value of $50,000 of a permanently restricted endowment fund for $55,000 before any dividends were earned on them. The donor restricted his gain to remain in the permanently restricted fund. 4. Sold general obligation bonds payable with a face amount of $1,000,000 at par with the proceeds required to be used for construction of a new building. This building was completed at a total cost of $1,000,000, and the total amount of bond issue proceeds was disbursed toward this cost. Disregard interest capitalization. Required: a. For each of these transactions or events, prepare journal entries without explanations, specifying the affected funds and showing how these transactions or events should be recorded by a local government whose debt is serviced by general tax revenue. b. For each of these transactions or events, prepare journal entries without explanations, specifying the affected funds and showing how a VHWO should record these transactions or events.
Akash M.
Harry and Natalie have been trading in partnership for many years, each receiving a salary of ÂŁ12,000 per annum and interest on initial capital injections at 9.9% per annum. Harry originally contributed capital of ÂŁ200,000, while Natalie contributed ÂŁ500,000. The balance of any profits was shared in the ratio 2:5. They drew up their accounts to 31 December each year. Natalie decided to retire from the partnership on 30 September 2021. Katy joined the partnership on the same day and introduced capital of ÂŁ300,000, on which she is also entitled to receive interest at 9.9% per annum. Katy receives an annual salary of ÂŁ15,000. Harry continues to receive a salary as before, and he and Katy now split the balance of profits equally. In the year ended 31 December 2021, the partnership made a tax-adjusted profit of ÂŁ246,600. Forecast tax-adjusted profits for the year ended 31 December 2022 are ÂŁ289,000. Natalie has overlap profits from a previous change of accounting date of ÂŁ9,500 and overlap profits from commencement of ÂŁ4,800. Natalie's husband, William, has bank interest income of ÂŁ10,000 and earned ÂŁ600 as a local exam invigilator during 2021/22. Natalie has pension income of ÂŁ25,000 for 2021/22. Requirements: (a) Calculate the allocation of the partnership's profits between Harry, Natalie, and Katy for both accounting periods. (b) Calculate the taxable trading profits for all three partners for all relevant tax years. Show the tax year in each case and the dates of the basis periods. State the amounts of any overlap profits and the periods to which they relate. (c) Calculate Natalie's and William's income tax liabilities for 2021/22. Explain whether the couple can make any beneficial elections. (d) Calculate Natalie's national insurance contributions for 2021/22.
Supreeta N.
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