Prepare a statement of functional expenses for the following entity using the following information. Charlie Counseling Center was incorporated as a not for profit entity 10 years ago. It’s adjusted trial balance as of June 30, 2018 is:
Charlie Counseling Center
Adjusted (Pre-Closing) Trial Balance
as of June 30, 2018
Debit Credit
Cash and cash equivalents 126,500
Pledges receivable 41,000
Estimated uncollectible pledges 4,100
Inventory - supplies 2,800
Long-term investments, at fair value 178,000
Capital assets, net of accumulated depreciation 90,000
Accounts payable 20,520
Unrestricted net assets 196,500
Donor restricted net assets 190,500
Contributions - unrestricted 348,820
Contributions - restricted 38,100
Investment Income - Unrestricted 9,200
Net assets released from restrictions -
Donor Restricted 22,000
Net assets released from restrictions - Unrestricted 22,000
Salaries and Fringe Benefits Expense 288,410
Occupancy and Utility Expense 38,400
Supplies Expense 6,940
Printing and Publishing Expense 4,190
Telephone and Postage Expense 3,500
Unrealized Gain on Investments 2,000
Depreciation Expense 30,000
Totals 831,740 831,740
Salaries and fringe benefits were allocated to program services and supporting services in the following percentages:
Counseling services 40
Professional training 20
Community Service 10
Management and General 20
Fund Raising 10.
Occupancy and utility, supplies, printing and publishing, and telephone and postage expenses were allocated to the programs in the same manner as salaries and fringe benefits. Depreciation expense was equally split among all five functional expense categories.
Prepare a statement of functional expenses from the information provided. Tell me if the program expense ratio is good relative to Charity Navigator's recommended 80% threshold.