Question: (Journal entries for a not-for-profit museum) Londonderry Fine Arts Center (LFAC) is a museum dedicated to collecting and displaying works of Vermont artists. It acquires works of art primarily from direct donations and from income provided by permanent endowments. It does not, however, capitalize its art collection and does not recognize revenue when art works are contributed to the collection. LFAC protects and cares for its art works and has a policy of using the proceeds from the sale of collection items solely to acquire new works of art. LFAC charges all expenses to four programs: curatorial and exhibition, art acquisition, education and public service, and administration. Make journal entries to record the following transactions and events.
1. Donor A contributed several works by N. Rockwell, which had an estimated fair value of $30,000 and were accepted by LFAC for its permanent collection.
2. Donor B contributed a painting not done by a Vermont artist. The donor agreed that LFAC would hold it for sale (it had an estimated fair value of $2,000) and use the proceeds to enhance its art collection.
3. LFAC sold the non-Vermont artist painting, referred to in the previous transaction, for $2,100. It used the proceeds, together with $1,900 of its unrestricted resources, to acquire several serigraphs by H. Shokler.
4. One of LFAC's permanent endowments provided investment income of $6,000. When she made the gift to LFAC, the donor had stipulated that all investment income be used solely for a special program to train local residents in the art of print making.
5. LFAC spent $6,000 on the training program described in transaction 4.
6. Local residents donated 1,000 hours of time collecting museum admissions fees; LFAC estimated these services had a value of $10,000. Also, a retired skilled craftsman donated 80 hours cleaning and preserving works of art recently acquired by the museum; LFAC estimated these services had a value of $4,000.
7. Admissions fees to the museum totaled $30,000.
8. As a result of a weakened stock market, the fair value of the permanent endowments held by the museum declined by $60,000.
9. LFAC paid curatorial and exhibition expenses of $80,000.