Non-Profit Organizations

Problem 1: Y Hospital, a Not-for-profit hospital affiliated with a religious group, reported the following
information for the year ended December 31, 2013:
Gross Patient service revenue

P2,400,000

Bad debts expense

Contractual
payors

50,000

adjustments

with

third

party

Charity Care

200,000
150,000

Allowance for discounts to hospital employees

1)

90,000

What is the net patient service revenues for the hospital for the year ended December 31, 2013?
A.
B.
C.
D.

3,270,000
2,110,000
1,960,000
3,120,000

Problem 2: During 2013, Z Hospital purchased medicines for hospital use totaling P1,000,000. Included in the
P1,000,000 was an invoice of P100,000 that was cancelled in 2013 by the vendor because the vendor wished
to donate this medicine to Z hospital.
1

What is the entry to record this donation?

Problem 3: AA Hospital had the following cash receipts for the year ended December 31, 2013:
Collections of receivables
Contribution
endowment

for

an

establishment

P500,000
of

term

Tuition from nursing school

100,000
200,000

Interest received from investment in permanent

endowments

35,000

Dividends received from investment in term

endowments

40,000

Payment of supporting expenses

150,000

Payment of program expenses

215,000

The interest received from permanent endowment is restricted by the donor for the acquisition of equipment.
1

How much is the net cash provided by operating activities?

Problem 4: ABC College, a private not-for-profit college received P80,000 from Ms. XXX on May 25, 2013. Ms.
XXX stipulated that her contribution be used to support faculty development seminars during the fiscal year
beginning on July 1, 2013. On July 15, 2013, administrators of ABC awarded seminar and training grants
totaling P65,000 to several faculty members in accordance with the wishes of Ms. XXX.
2)

For the year ended June 30, 2013, ABC should report the 80,000 contribution as
A. Temporarily restricted revenues on the statement of activities
B. Unrestricted revenue on the statement of activities
C. Temporarily restricted deferred revenue on the statement of activities

D. An increase in fund balance on the statement of financial position.

Problem 5: XYZ, a private not-for-profit university, had the following cash inflows during the year ended June
30, 2013:
I.
II.
III.

P800,00 from students for tuition

P450,000 from a donor who stipulated that the money be invested indefinitely
P280,000 from a donor who stipulated that the money be spent in accordance with the wishes of
XYZs governing board.

On XYZs cash flow statement for the year ended June 30, 2013, what amount should be reported
under financing activities?
A.
B.
C.
D.

280,000
730,000
1,080,000
450,000

Problem 6: Wild Life Park, a private not-for-profit zoological society received contributions restricted for
research totaling P175,000 in 2012. None of the contributions were spent on research in 2012. In 2008,
P122,500 of the contributions were used to support the research activities of the society.
1

The net effect on the statement of activities for the year ended December 31, 2013, for Wild Life
Park would be...
A.
B.
C.
D.

52,500 increase in temporarily restricted revenue

122,500 decrease in temporarily restricted revenue
122,500 increase in temporarily restricted net assets
122,500 decrease in unrestricted revenue

Problem 7: TUV hospital, a private not-for-profit hospital, earned P500,000 of gift shop revenues and spent
P100,000 on research during the year ended December 31, 2013. The P100,000 spent on research was part
of a P150,000 contribution received during December of 2012 from a doctor who stipulated that the donation
be used for medical research. Assume none of the gift shop revenues were spent in 2013.
1

For the year ended December 31, 2013, what was the increase in unrestricted net assets from
events occurring in 2013?
A.
B.
C.
D.

600,000
650,000
500,000
350,000

Problem 8: HIJ College, a private not-for-profit college, received the following contributions during 2013:
I.

P1,250,000 from alumni for construction of a new wing on the science building to be constructed in
2014
P250,000 from a donor who stipulated that the contribution be invested indefinitely and that the
earnings be used for scholarships. As of December 31, 2013, earnings from investment amounted
to P12,500.

II.

For the year ended December 31, 2013, what amount of these contributions should be reported as
temporarily restricted revenues on the statement of activities?
A.
B.
C.
D.

1,262,500
12,500
1,250,000
1,512,500

Problem 9: Mr. Fook Yu works full time for a nonprofit organization for 5 months now, he fills the position of
finance director, a position that normally pays P750,000 per year. Mr. Yu accepts no salaries for his work.
1

How should these services be recorded?