COMPLETE SOLUTION MANUAL FOR
MODERN ADVANCED ACCOUNTING IN
CANADA 11TH EDITION HILTON MURRAY,
HERAUF DARRELL
Chapters realigned
Chapter 12
Accounting for Not-for-Profit and Public
Sector Organizations
,A brief description of the major points covered in each case and problem.
CASES
Case 12-1
A son of a patient in a hospital pledged $5 million to the hospital in gratitude for the
service. The hospital must decide how to report or disclose the pledge.
Case 12-2
The newly formed audit committee of a youth centre has raised a number of accounting
issues. Students are required to prepare a written response in their role as auditor.
Case 12-3
A private high school has recently completed a very successful fundraising campaign.
You have been asked to prepare a memo to the headmaster outlining how the money
received should be accounted for. Taken from a CGA exam.
Case 12-4
This case, adapted from a CPA exam, involves the start-up of a not-for-profit radio station. You
are asked to discuss the viability of the proposed radio station over the initial three-year period
and to recommend accounting policies for the transactions that the radio station is
contemplating. The transactions include donated goods and services, endowment contributions
and member borrowings on behalf of the radio station.
Case 12-5
This case, adapted from a CPA exam, involves the start-up of a not-for-profit breast milk bank.
You are asked to select appropriate accounting policies relating to contributions of cash,
materials and services, revenue recognition, tangible capital assets, and inventory. You are also
asked to provide advice on other strategic issues.
Case 12-6
A First Nation has managed to operate for a number of years without preparing audited
financial statements but some major entrepreneurial activities entered into recently now
necessitate the preparation of audited statements. Students are required to prepare a
report to discuss the GAAP requirements for this organization.
Copyright 2019 McGraw-Hill Education. All rights reserved.
748 Modern Advanced Accounting in Canada, Ninth Edition
,Case 12-7
A for-profit company is owned 50% by the provincial government and 50% by three
private companies. You are asked to prepare a report to resolve accounting issues
related to contribution of assets, royalties to owners, revenue recognition, property, plant
and equipment and start-up costs.
PROBLEMS
Problem 12-1 (15 min.)
Journal entries are required under the deferral method.
Problem 12-2 (35 min.)
This question requires students to prepare a statement of operations and statement of
financial position using the restricted fund method after being given a cash flow
statement and a description of transactions. You are also required to calculate the
average cost per child.
Problem 12-3 (30 min.)
This problem is identical to problem 2 except that the deferral method of reporting is to be used
and you are not required to calculate the average cost per child.
Problem 12-4 (20 min.)
Journal entries are required for a restricted contribution to acquire land and buildings using the
deferral method.
Problem 12-5 (30 min.)
This problem requires the preparation of a statement of financial position using the deferral
method.
Copyright 2019 McGraw-Hill Education. All rights reserved.
Solutions Manual, Chapter 1 749
, Problem 12-6 (30 min.)
This problem is identical to problem 5 except that the restricted fund method of reporting is to be
used for three separate funds.
Problem 12-7 (30 min.)
This problem requires the preparation of an operating statement using the deferral method. The
calculation of the amounts for certain statement of financial position items is also required.
Problem 12-8 (25 min.)
Journal entries are required for a series of transactions using the restricted fund method.
Problem 12-9 (30 min.)
This problem requires the preparation of a statement of revenues and expenses as well as a
statement of changes in net assets using the deferral method.
Problem 12-10 (30 min.)
This problem is identical to problem 9 except that the restricted fund method of reporting is to be
used for two separate funds.
Problem 12-11 (9 min.)
This is a comprehensive problem requiring the preparation of journal entries necessary to
record a year's transactions as well as the preparation of a complete set of the year-end
financial statements using the restricted fund method. You are also required to calculate the
percent of revenue used for fundraising and general support activities.
Problem 12-12 (90 min.)
This problem is identical to problem 11 except that the deferral method of reporting is to be
used. You are also required to calculate what portion fundraising costs are as a percent of
revenue.
Problem 12-13 (60 min.)
Students are directed to access the 2017 financial statements of the University of
Saskatchewan on the Internet. They are required to answer a series of questions pertaining to
the accounting and reporting for contributions, pledges, cost allocation and investments.
Copyright 2019 McGraw-Hill Education. All rights reserved.
750 Modern Advanced Accounting in Canada, Ninth Edition
MODERN ADVANCED ACCOUNTING IN
CANADA 11TH EDITION HILTON MURRAY,
HERAUF DARRELL
Chapters realigned
Chapter 12
Accounting for Not-for-Profit and Public
Sector Organizations
,A brief description of the major points covered in each case and problem.
CASES
Case 12-1
A son of a patient in a hospital pledged $5 million to the hospital in gratitude for the
service. The hospital must decide how to report or disclose the pledge.
Case 12-2
The newly formed audit committee of a youth centre has raised a number of accounting
issues. Students are required to prepare a written response in their role as auditor.
Case 12-3
A private high school has recently completed a very successful fundraising campaign.
You have been asked to prepare a memo to the headmaster outlining how the money
received should be accounted for. Taken from a CGA exam.
Case 12-4
This case, adapted from a CPA exam, involves the start-up of a not-for-profit radio station. You
are asked to discuss the viability of the proposed radio station over the initial three-year period
and to recommend accounting policies for the transactions that the radio station is
contemplating. The transactions include donated goods and services, endowment contributions
and member borrowings on behalf of the radio station.
Case 12-5
This case, adapted from a CPA exam, involves the start-up of a not-for-profit breast milk bank.
You are asked to select appropriate accounting policies relating to contributions of cash,
materials and services, revenue recognition, tangible capital assets, and inventory. You are also
asked to provide advice on other strategic issues.
Case 12-6
A First Nation has managed to operate for a number of years without preparing audited
financial statements but some major entrepreneurial activities entered into recently now
necessitate the preparation of audited statements. Students are required to prepare a
report to discuss the GAAP requirements for this organization.
Copyright 2019 McGraw-Hill Education. All rights reserved.
748 Modern Advanced Accounting in Canada, Ninth Edition
,Case 12-7
A for-profit company is owned 50% by the provincial government and 50% by three
private companies. You are asked to prepare a report to resolve accounting issues
related to contribution of assets, royalties to owners, revenue recognition, property, plant
and equipment and start-up costs.
PROBLEMS
Problem 12-1 (15 min.)
Journal entries are required under the deferral method.
Problem 12-2 (35 min.)
This question requires students to prepare a statement of operations and statement of
financial position using the restricted fund method after being given a cash flow
statement and a description of transactions. You are also required to calculate the
average cost per child.
Problem 12-3 (30 min.)
This problem is identical to problem 2 except that the deferral method of reporting is to be used
and you are not required to calculate the average cost per child.
Problem 12-4 (20 min.)
Journal entries are required for a restricted contribution to acquire land and buildings using the
deferral method.
Problem 12-5 (30 min.)
This problem requires the preparation of a statement of financial position using the deferral
method.
Copyright 2019 McGraw-Hill Education. All rights reserved.
Solutions Manual, Chapter 1 749
, Problem 12-6 (30 min.)
This problem is identical to problem 5 except that the restricted fund method of reporting is to be
used for three separate funds.
Problem 12-7 (30 min.)
This problem requires the preparation of an operating statement using the deferral method. The
calculation of the amounts for certain statement of financial position items is also required.
Problem 12-8 (25 min.)
Journal entries are required for a series of transactions using the restricted fund method.
Problem 12-9 (30 min.)
This problem requires the preparation of a statement of revenues and expenses as well as a
statement of changes in net assets using the deferral method.
Problem 12-10 (30 min.)
This problem is identical to problem 9 except that the restricted fund method of reporting is to be
used for two separate funds.
Problem 12-11 (9 min.)
This is a comprehensive problem requiring the preparation of journal entries necessary to
record a year's transactions as well as the preparation of a complete set of the year-end
financial statements using the restricted fund method. You are also required to calculate the
percent of revenue used for fundraising and general support activities.
Problem 12-12 (90 min.)
This problem is identical to problem 11 except that the deferral method of reporting is to be
used. You are also required to calculate what portion fundraising costs are as a percent of
revenue.
Problem 12-13 (60 min.)
Students are directed to access the 2017 financial statements of the University of
Saskatchewan on the Internet. They are required to answer a series of questions pertaining to
the accounting and reporting for contributions, pledges, cost allocation and investments.
Copyright 2019 McGraw-Hill Education. All rights reserved.
750 Modern Advanced Accounting in Canada, Ninth Edition
