A group of civic-minded merchants in Eldora organized the Committee of 100 for establishing the Community Sports Club, a not-for-profit sports organization for local youth. Each of the committee’s 100 members contributed $1,000 toward the club’s capital and, in turn, received a participation certificate. In addition, each participant agreed to pay dues of $200 a year for the club’s operations. All dues have been collected in full by the end of each fiscal year ending March 31. Members who have discontinued their participation have been replaced by an equal number of new members through transfer of the participation certificates from the former members to the new ones. Following is the club’s trial balance for April 1, 20X2: Debit credit
Cash 90000
Investment 58000
Inventories 5000
Land 10000
Building 164000
Accumulated depreciation---building 130,000
Furniture and equipment 54000
Accumulated depreciation furniture and equipment 46000
Accounts payable 12000
Participation certificates 100000
Cumulative excess of revenue over expenses 12000
Toatal 300000 300000
Transactions for the year ended March 31, 20X3, follow:
Adjustment Data
1. Investments are valued at market, which totaled $65,000 on March 31, 20X3. There were no investment transactions during the year.
2. Depreciation for year: Building $4,000 Furniture & equipment 8,000
3. Allocation of depreciation: House expenses $9,000 Snack bar & soda fountain ... 2,000 General and administrative ... 1,000
4. Actual physical inventory on March 31, 20X3, was $1,000 and pertains to the snack bar and soda fountain.
Required:
a. Record the transactions and adjustments in journal entry form for the year ended March 31, 20X3. Omit explanations.
b. Prepare the appropriate all-inclusive statement of activities for the year

Community Sports Club

a. Adjusting Journal Entries on March 31, 20x3:

Description                               Debit              Credit

Investment Account               $7,000

Unrealized Investment Gains                        $7,000

Depreciation Expense         $12,000

Accumulated Depreciation - Building          $4,000

Acc. Depreciation - Furniture & Equipment  8,000

House Expenses                 $9,000

Snack bar & soda fountain   2,000

General and administrative   1,000

Depreciation Expenses                              $12,000

Cost of Inventory sold      $4,000

Inventory                                                     $4,000

b. Financial Statement of Activities for the year ended March 31, 20x3:

Cumulative excess of revenue over expenses  $12,000

Cost of Inventory Sold                                            (4,000)

Depreciation Expenses:

 House Expenses                                                   (9,000)

 Snack bar & soda fountain                                   (2,000)

General and administrative                                    (1,000)

Cumulative excess of revenue over expenses  ($4,000)

Explanation:

Data and Calculations:

1. Community Sports Club

Unadjusted Trial balance for April 1, 20X2:

                                                              Debit           Credit

Cash                                                      $9,000

Investment                                            58,000

Inventories                                              5,000

Land                                                       10,000

Building                                                164,000

Accumulated depreciation---building                       $130,000

Furniture and equipment                    54,000

Accumulated depreciation furniture & equipment     46,000

Accounts payable                                                          12,000

Participation certificates                                             100,000

Cumulative excess of revenue over expenses          12,000

Total                                                $300,000        $300,000

2. Adjusted Trial Balance for March 31, 20x3:

                                                              Debit           Credit

Cash                                                      $9,000

Investment                                            65,000

Inventories                                               1,000

Land                                                       10,000

Building                                                164,000

Accumulated depreciation---building                       $134,000

Furniture and equipment                    54,000

Accumulated depreciation furniture & equipment     54,000

Accounts payable                                                          12,000

Participation certificates                                             100,000

Unrealized Investment Gain                                          7,000

Depreciation Expenses:

 House                                                    9,000

 Snack bar & Soda Fountain                 2,000

 General and Administrative                  1,000

Cost of Inventory Sold                           4,000

Cumulative excess of revenue over expenses          12,000

Total                                                 $319,000         $319,000

3. The Club's Statement of Activities is like the income statement of a business entity. This statement reports the revenues and expenses of the club and the changes in the net assets of the company, like depreciation expenses and cost of inventory.  Like the income statement it reports the excess of revenue over expenses or vice versa.  The resulting figure (difference) is not called the net income or loss, but excess of revenue over expenses.

answer; lags, push the econ below the natural level of output;