The Science Road Show (SRS) is a not-for-profit organization that puts on traveling science demonstrations throughout the state. SRS operates on a September 1-August 31 fiscal year. The organization began FY 2018 with the following account balances:
Grants Receivable 100,000
Pledges Receivable, Net 10,000
PP&E, Net 75,000
Prepaid Rent 10,000
Unrestricted Net Assets 169,000
Wages Payable 20,000
The SRS recorded the following financial transactions during the FY 2018, which ended on August 31, 2018.
- On September 1, SRS took out a $200,000 bank loan with an annual interest rate of 4.5%. SRS’s prior outstanding loan has an annual interest rate of 6.0%. Annual interest payments on both loans are due August 31.
- Halfway through the fiscal year, SRS used the new loan proceeds to purchase a new set that is expected to last 10 years and have no salvage value. SRS also recorded %5,000 in depreciation on its existing equipment, per its policy of recording depreciation annually.
- On the first day of the fiscal year, SRS held a membership drive. Each 2-year membership is priced at $1,000 and entitles the member to benefits for 2 years. SRS sold an received payment for 50 memberships.
- SRS sold $375,000 in tickets. All tickets were paid for in cash.
- SRS received a $100,000 check for a foundation grant that was awarded in the previous fiscal years. At the end of FY 2018, SRS was awarded another $50,000 foundation grant. Payments on the second grant is expected in October 2018.
- During the fiscal year, SRS received $60,000 in new donor pledges and collected 60% of the outstanding pledges from the previous fiscal year. Based on past experience, SRS expects that none of the remaining outstanding pledges from the prior fiscal year will be collected.
- Throughout FY 2018, SRS ordered, paid for, and used $15,000 of program booklets. In August, SRS ordered (on account) $5,000 of programs for the following fiscal year.
- SRS’s employees earned $25,000 per month. Employees are paid with a 1-month lag. SRS also fully paid its prior-year obligations to employees.
- Payments on SRS’s leased vehicles and equipment are due 1 month in advance. In FY 2018, lease payments totaled $10,000 per month. In FY 2019, they will rise to $12,000 per month.
- On August 31, in addition to making annual interest payments, SRS repaid the loan outstanding prior to FY 2018 in full. A $25,000 principle repayment on the loan taken out at the beginning of FY 2018 is due on September 1, 2018.