During 2017 the lung association received a contribution of marketable securities that were to be placed in a permanent endowment fund. neither donor stipulations nor applicable state law requires that capital gains or increases in value be added to the endowment principal. the income from the securities was to be restricted to research in pulmonary diseases. the following schedule indicates the value of the securities as of the date of receipt (labeled "cost"), the fair value at december 31, 2017, and the unrealized gains and losses of the year.
endowment portfolio as of december 31, 2017 (in thousands)
cost fair value unrealized gain (loss)
northwest industries $260 $275 $15
campbell corp. 317 304 (13)
st. regis, inc. 141 171 30
$718 $750 $32
1. prepare a journal entry to record the unrealized net gain during the year. be sure to indicate the type of fund+(unrestricted, temporarily restricted, or permanently restricted) in which the entry would be made. assuming no other transactions and no other assets in the relevant funds, show how the investments would be reported on the hospital's year-end 2017 statement of financial position.
2. during 2018, the hospital sold northwest industries for $280. prepare appropriate journal entries to record the sale. credit the gain to the same account in which you credited the unrealized appreciation of 2017.
3. as of december 31, 2018, the market value of campbell corp. had increased to $320; that of st. regis, inc., to $180. prepare a journal entry to record the unrealized gain during the year. show how the association would report the investment portfolio on its december 31, 2018, statement of financial position. you may combine the cash and securities of each type of fund into a single account.

The answers are below

Explanation:

1. Entry to record unrealized gains (in thousands, in a temporarily restricted fund)

Investments DR $ 32

Investment earnings—appreciation in fair valueCR$ 32

(To record the increase in fair value)

At year-end, the investment portfolio would be shown on the balance sheet in two categories:

Temporarily restricted       $32

Permanently restricted      718

Total (i.e., fair value)       $750

2. Entries to record sale (in thousands) of Northwest Industries for $280.

Cash DR $260

Investments CR$260

(To record the sale of securities in the permanently restricted endowment fund)

Cash DR$20

Investments CR$15

Investment earnings—appreciation in fair value$5

3. The fair value of the two securities as of December 31, 2018 was $500; as of December31, 2017 it was only $475. Hence, the unrealized gain during the year was $25. The following entry, in a temporarily restricted fund, records the gain during the year:

Investments DR$25

Investment earnings—appreciation in fair value$25

(To record the increase in fair value)

The investment portfolio would be on the balance sheet as follows:

Temporarily restricted                $62

Permanently restricted             $718

Total (i.e., fair value)                $780

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know