Chapter 12: Nonprofit Organization

1. Albert University, is a private nonprofit university, had the following cash inflows during the year
ended Dec 31, 2011:

I. P500,000 from students for tuition.

II. P300,000 from a donor who stipulated that the money be invested indefinitely.
III. P100,000 from a donor who stipulated that the money be spent in accordance to the wishes of
Albert’s board of Directors.

On Albert University’s statement of cash flows for the year ended Dec 31, 2011, what amount of these
cash flows should be reported as operating activities:

a. P900,000
b. P400,000
c. P800,000
d. P600,000

2. Santa Clara Hospital, a private nonprofit hospital, earned P250,000 revenues from its gift shop located
at the lobby and spent P50,000 on research during the year ended Dec 31, 2011. The P50,000 spent on
research was part of a P75,000 contribution received during Dec of 2010 from a donor who stipulated
that the donation be used for medical research. Assume none of the gift shop revenues were spent in
2011. For the year ended Dec 31, 2011 what was the increase in unrestricted net assets from the events
that occurred during 2011?

a. P300,000
b. P200,000
c. P250,000
d. P275,000

3. Luneta Park, a nonprofit organization, received contributions restricted foe research totaling P50,000
in 2011. Assume the P50,000 was not expensed in 2011. These contributions were used to purchase
P35,000 of research equipment in 2011. As a result of these transactions, for the year ended Dec 31,
2011. Luneta Park will report, on its statement of activities, a:

a. P15,000 increase in temporarily restricted net assets.

b. P50,000 increase in temporarily restricted net assets.
c. P35,000 increase in restricted net assets.
d. P15,000 increase in unrestricted net assets.

4. Santa Fe Hospital, a private nonprofit Hospital, had the following cash receipts for the year ended Dec
31, 2011:

Patient service revenue P300,000

Gist shop revenue 25,000
Interest income restricted by donor for the
Acquisition of computer equipment 50,000
As a result of these cash receipts, the hospital’s statement of cash flows for the year ended of Dec 31,
2011 would report an increase in operating activities of

a. P325,000
b. P375,000
c. P350,000
d. P350,000

5. San Luis Hospital, nonprofit hospital affiliated with a religious group, reported the following
information for the year ended Dec 31, 2011:

Goss patients service revenue at the full rates P980,000

Bad debts expense 10,000
Contractual adjustments, Value added tax (VAT) 89,090
Allowance for adjustments to hospital employees 15,000

On hospital’s statement of activities for the year ended Dec 31, 2011, what amount should be reported
as net patient service revenue?

a. P875,910
b. P890,910
c. P855,000
d. P955,000

6. San Jose Hospital, nonprofit hospital affiliated with San Carlos College, had the following cash receipts
for the year ended Dec 31, 2011:

Patient service revenue P750,000

Contribution from donor to be invested indefinitely
(endowment fund) 250,000
Tuition fees from nursing school 50,000
Dividends received from permanent investments 80,000

The dividends received are restricted by the donor for hospital building improvements. No
improvements were made during 2011. On the hospital’s statement of cash flows for the year ended
Dec 31, 2011, what amount of these cash receipts would be included in the amount reported for net
cash provided (used) by operating activities?

a. P880,000
b. P800,000
c. P1,050,000
d. P750,000

7. Santa Rosa College, a private nonprofit college, received the following contributions during 2011:

I. P5,000,000 from alumni for construction of a new wing on the building to be constructed in 2011.
II. P1,000,000 from a donor who stipulated that the contribution be invested indefinitely and that the
earnings be used for scholarships. As of Dec 31, 2011, earnings from investments amounted to P50,000.
For the year ended Dec 31, 2011, what amount of these contributions should be reported as temporarily
restricted revenues on the statement of activities?

a. P50,000
b. P5,050,000
c. P5,000,000
d. P6,050,000

8. On Dec 30, 2011, Saint Peter Hospital, a nonprofit organization, received a P7,000,000 donation of BW
Co. shares of stock with donor-stipulated requirements as follows:

Shares valued at P5,000,000 are to be sold, with the proceeds used t erect a building.
Shares valued at P2,000,000 are to be retained, with the dividends used to support current operations.

As a result of the receipts of the BW shares how much should Saint Peter Hospital report as temporarily
restricted net assets on its 2011 statement of financial position?

a. P 0
b. P2,000,000
c. P5,000,000
d. P7,000,000

9. San Miguel Hospital, a nonprofit hospital affiliated with a private university, reported te following
data for the year ended Dec 31, 2011.

Cash contributions received from donors for acquisition of

Computer equipment on 2012 P150,000
Proceeds from sale of hospital gift shop and snack bar 75,000
Dividend income not restricted by donor 25,000

Using the information provided, what amount should be reported as “other revenue and games” on the
hospital’s statement of activities for the year ended Dec 31, 2011?

a. P25,000
b. P75,000
c. P100,000
d. P250,000

10. A nonprofit organization had the following cash contributions and expenditures in 2011:

Unrestricted cash contributions P500,000

Restricted cash contributions for the acquisition of property 200,000
Cash expenditures to acquire property 200,000

The statement of cash flows should include which of the following amounts?

Operating activities Investing activities Financing activities

a. P700,000 P(200,0000 P0
b. P500,000 P0 P0
c. P500,000 P(200,000) P200,000
d. P 0 P500,000 P200,000

11. UST Hospital, a nonprofit hospital affiliated with UST, received the following cash contributions from
donors during the year ended Dec 31, 2011:

Contributions restricted by donors for research P50,000

Contributions restricted by donors for acquisition of
Hospital equipment 250,000

Neither of the contributions was spent during 2010, however, during 2011, the hospital spent the entire
P50,000 contribution on research and the entire P250,000 contribution on hospital equipment which
was used during the year.

On UST Hospital’s statement of operations for the year ended Dec 31, 2011, what total amount should
be reported for “ net assets released from restrictions.”?

a. P300,000
b. P50,000
c. P250,000
d. P 0

12. Miriam Hospital, a nonprofit hospital affiliated with Miriam College, had the following cash receipts
for the year ended Dec 31, 2011:

Collections of Philhealth care receivable P750,000

Contribution from donor to established a term endowment 250,000
Tuition fees from nursing schools 50,000
Dividends received from investments in permanent
Endowment 80,000

The dividends received are restricted by the donor for hospital building improvements. No
improvements was made during 2011:

On the hospital’s statement of cash flows for the year ended Dec 31,2011, what amount of these cash
receipts would be included in the amount reported for net cash provided (used) by operating acivities?

a. P880,000
b. P800,000
c. P1,050,000
d. P750,000

13. Christian Hospital, a nonprofit hospital affiliated with a religious group, received the following cash
contributions from doctors during the year ended Dec 31, 2011:

Capital acquisitions of hospital equipment P400,000

For permanent endowment P300,000

The cash received for acquisition of hospital equipment will be spent in 2012, while the cash received for
the permanent endowment was used to acquire investment during 2011:

What affect did these cash contributions have on the amount reported for cash flows from investing
activities and cash flows from financing activities on the statement of cash flows for the year ended Dec
31, 2011:

Cash flows from Cash flows from

Investing activities Financing activities
a. Decrease P300,000 Increase P400,000
b. Decrease P700,000 Increase P700,000
c. Decrease P300,000 Increase P300,000
d. Decrease P300,000 Increase P400,000

14. For the 2011 summer session, San Carlos University, a nonprofit university assessed its students
P300,000 for tuition and miscellaneous fees, the net amount realized was only P290,000 because of the
following reductions:

Tuition remissions granted to faculty member families P3,000

Class cancellation refunds 7,000

How much unrestricted current fund revenues from tuition and miscellaneous fees should San Carlos
University report for the period?

a. P290,000
b. P293,000
c. P297,000
d. P300,000

15. For the summer session for 2011, Mindanao State University assessed its students P1,700,000 (net
of refunds), covering tuition and fees for educational and general purposes. However, only P1,500,000
was expected to be realized because scholarship totaling P150,000 were granted to students and tuition
remissions of P50,000 were to faculty member’s children attending the university.

What amount should Mindanao State University include in the unrestricted current funds as revenues
from students ad fees?

a. P1,500,000
b. P1,550,000
c. P1,650,000
d. P1,700,000

16. The following receipts were among those recorded by Baliwag College, a nonprofit organization,
during 2011:

Unrestricted gifts P500,000

Restricted current funds (expended for current
Operating purposes) 200,000
Restricted current funds (not yet expended) 100,000

What amount should be included as?

Current Fund
Revenues Revenue
a. P800,000 P700,000
b. P700,000 P800,000
c. P600,000 P600,000
d. P500,000 P500,000

17. Love and Care, a nonprofit organization, received the following contributions in 2011:

I. P50,000 from a donor who stipulated that the money not be spent until 2012.
II. P100,000 from a donor who stipulated that the contributions be used for the acquisition of
equipment, none of which was acquired in 2011.

What is the increase in temporarily restricted net asset for the year ending Dec 31, 2011?

a. P50,000
b. P150,000
c. P100,000
d. P 0

18. Gentle Care foundation, a nonprofit organization, received the following pledges:

Unrestricted P200,000
Restricted for acquisition of equipment 150,000

All pledges are legally enforceable; however the foundation’s experience indicates that 10% of all
pledges prove to be uncollectible.

What amount should the foundation report as pledges receivable, net of any required allowance
account?

a. P135,000
b. P180,000
c. P315,000
d. P350,000

19. Bantay Bata Foundation, a non profit organization, receives revenue from various sources during the
year to its child care center. The following cash contributions were received during 2011:

a. P40,000 restricted by the donor to be used for meals of children.

b. P15,000 received by subscriptions to a monthly child care magazine with a fair value to subscribe of
P10,000.
c. P10,000 to be used only upon completion of a new playroom that was 75% complete at Dec 31, 2011.

What amount should Bantay Bata Foundation records as contribution revenues in its 2011 Statement of
Activities?

a. P20,000
b. P25,000
c. P10,000
d. P11,000

20. During the year ended Dec 31, 2011, Cultural Center of the Philippines, a nonprofit organization,
received the following donor—restricted contributions and investment income:

a. Cash contribution of P100,000 to be permanently invested.

b. Cash dividends and interest of P5,000 to be used for the acquisition of theater equipment.

As a result of these cash receipts, the statement of cash flows for the year ended Dec 31,2011 would
report a increase of:

a. P105,000 from operating activities.

b. P105,000 from financing activities.
c. P5,000 from operating activities and an increase of P100,000 from financing activities.
d. P100,000 from operating activities and an increase of P5,000 from financing activities.