Case 4.2: Rain Shadow Meals on Wheels

Rain Shadow Meals on Wheels (i.e. “Rain Shadow”) prepares and delivers hot meals to senior citizens. Its fiscal year is January-December. At the end of fiscal year 2018, it had the following ending balances for its assets, liabilities, and net assets.

Cash $208,500
Accounts Payable $75,000
Accounts Receivable $50,000
Pledges Receivable $10,000
Pre-Paid Expenses $0
Note Payable $8,000
Deferred Revenue $1,000
Inventory $75,000
Property Plant & Equipment $100,000
Long-Term Investments $1,000,000
Net Assets with Donor Restrictions $1,004,500
Wages Payable $5,000

Using the worksheet below and the chart of accounts for the ending balances listed above, record these transactions for Rain Shadow during fiscal year 2019:

  1. On January 2, 2019, Rain Shadow purchased $100,000 of new food preparation equipment. It was paid with cash.
  2. On January 10, 2019, Rain Shadow paid $15,000 for a full year of insurance on its food preparation/distribution facility.
  3. On January 15, 2019, Rain Shadow paid $5,000 in wages employees earned in the final pay period of 2018.
  4. In November 2018, a local community foundation donated $2,500 for a nutrition education program that Rain Shadow agreed to deliver in early 2019. On February 1, 2019, Rain Shadow delivered that program. To deliver that program, it paid $2,000 to an outside consultant and used $500 of inventory.
  5. On April 1, 2019, Rain Shadow concluded its first quarter fundraising drive. It received $50,000 in cash donations and $100,000 in pledges. Historically, 90 percent of pledges have been collected.
  6. On July 12, 2019, Rain Shadow paid its suppliers and vendors $25,000.
  7. On July 15, 2019, Rain Shadow purchased inventory valued at $10,000 and received invoices from its suppliers.
  8. On September 1, 2019, a local wholesale food distributor donated $2,000 of supplies. Rain Shower used that food to prepare meals.
  9. On November 10, 2019, a local adult day services center paid Rain Shadow $5,000 for a nutrition education program. Rain Shadow will deliver that program in early 2020.
  10. On December 10, 2019, Rain Shadow’s investment manager reported that long-term investments are now valued at $1,050,000. Rain Shadow had received interest and dividend income from its investments of $35,000. All income from investments would be used to support general operations.
  11. Through December 31, 2019, Rain Shadow used $80,000 of labor. All wages were paid in cash.
  12. Depreciation expense totaling $20,000 was recorded on December 31, 2019.

Using the chart of accounts, the following Excel template file ( and transactions for the year ended December 31, 2019, to prepare the Statement of Financial Position and Statement of Activities for the year ended December 31, 2019.


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Financial Strategy for Public Managers Copyright © 2023 by Sharon Kioko and Justin Marlowe is licensed under a Creative Commons Attribution 4.0 International License, except where otherwise noted.