Year-end adjusting journal entries


Centerville Art Museum received the following contributions in 2009. Prepare journal entries to record these events and any year-end adjusting journal entries resulting from the events.

(a) Unrestricted pledges of support were received in the amount of $70,000. All of these are due within the year and it is estimated that 10% will ultimately prove to be uncollectible.

(b) 1,200 Memberships were sold to the public in the amount of $40 each. Membership provides the individual with a monthly magazine and other benefits. The estimated fair value of member benefits is $25. The member year runs from July 1 to June 30.

(c) A local carpenter donated supplies and labor with values of $14,000 and $5,000 to construct a new exhibition area. Fixed assets are classified as unrestricted net assets.

(d) On March 1, 2009 a local businessman made a pledge payable in a future period. The pledge is restricted in purpose and has a present value of $140,000 (effective interest rate of 8%).

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Accounting Basics: Year-end adjusting journal entries
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