Evaluating the Michael J Fox Foundation for Parkinson’s Research

Evaluating the Michael J Fox Foundation for Parkinson’s Research
Consolidated Financial Statements

You can answer the following questions by reviewing and using the information articulated in The Michael J Fox Foundation for Parkinson’s Research Consolidated Financial Statements for 2013 (and 2012).   Try to be succinct and you should show any computations you make to arrive at your answer. You should identify the accounting entry and document you relied upon to create your answer (the documents include the Balance Sheet, Income Statement, and Statement of Cash Flows).   

1. The foundation reported property and equipment worth $2,144,389 in 2012 and $1,602,342 in 2013.   Assume the foundation purchased $300,000 worth of computer equipment in 2013 but acquired no other new property, plant, or equipment.   How much was its depreciation expense for 2013?   

2. On the balance sheet you may notice that a) loans payable was the exact same amount in 2012 as 2013, b) interest payable increased from $215,395 to $274,883. Assuming the foundation maintained the same interest payment schedule in 2013 as it had in 2012, what does this imply happened to the interest rate creditors charged the foundation for its loans and credit?

3. Grants payable (a liability) represented what percentage of the Foundation’s cash and cash equivalents in 2012 and then in 2013?   

4. If the foundation anticipates that contributions will rise from $86 million in 2013 to $94.6 million in 2014, what would you estimate it would commit for grants in 2014?   

5. How much does raising money cost the foundation? How much does raising money cost the foundation as a percentage of the donations it receives?   Please show your work for these answers.

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1. The foundation reported property and equipment worth $2,144,389 in 2012 and $1,602,342 in 2013.   Assume the foundation purchased $300,000 worth of computer equipment in 2013 but acquired no other new property, plant, or equipment.   How much was its depreciation expense for 2013?   According to Note 1 of the financial statements, the foundation assigns computer equipment a five year useful life. Using this life, the depreciation expense for the equipment is $60,000 (300,000 / 5), and total expense would be as follows:

2012 Depreciation Expense from the statement of functional expense 668,504
2013 Computer Equipment (300,000 / 5 years)                                   60,000
Total depreciation expense                                                                 728,504...