A private, not-for-profit hospital received a contribution of $40,000 on June 15, 20X8. The donor restricted the contribution to funding research activities currently being performed by the hospital. For  the year ended December 31, 20X8, the hospital spent $30,000 of the contribution on research  activities. The hospital expended the remaining $10,000 on research activities in January of 20X9. Thehospital  uses a fund structure to account for all activities.

1) Record all journal entries relative to these transactions. Note: Be sure to include dates for all journal entries, and to identify the fund in which the transaction occurs.

2) On the statement of cash flows prepared for the year ended December 31, 20X8, the events described would increase net cash flows provided by how much? Identify which section of cash  flows would be affected (i.e. Financing, Investing, or Reporting).

3) What effect would the transactions have on the statement of operations prepared for the year ended December 31, 20X8?

4) What effect would the transactions have on the statement of changes in net assets prepared for the year ended December 31, 20X8? (i.e. increase unrestricted assets by $xx, etc.)

ABC Hospital, a NFP organization, received a $1,000,000 donation from John and Jane Doe on 1/1/14. The Does stipulated that their donation should be held permanently. The Does further stipulated that any increases to the value of the donation should remain in perpetuity. Any investment earnings are to be used to pediatric cancer research. During 2014, ABC invested the $1,000,000 in securities that increased in market value by $100,000 by 12/31/14. The investment also earned $50,000 in interest andividends. $25,000 of these vestment earnings were used for pediatric cancer research in 2014.

1) Record all journal entries relative to these transactions. Note: Be sure to identify the fund in which the transaction occurs (dates are not necessary for the journal entries).