Preparing Year-End Adjustments for Not-for-Profit Organization MSO

Year-End Adjustments

a.Prepare the journal entries for year-end adjustments, including the following:
amortization of capital assets
accruals of receivables and payables, including the GST rebate
adjustments to deferred contributions (capital asset and operating)
transfer of internally restricted net assets
For these entries, prepare each adjusting entry in Excel, showing your calculations and providing a description of the entry, then record the entry in Sage 50. Do not forget to assign income and expense entries to the correct fund. For your submission, only submit the Excel portion of the adjusting entries.
After completing the above entries, prepare any other adjusting entries required to complete part b) in Excel. Record these entries in Sage 50

You are a senior accountant with Edwin & Associates, CPAs, and work in the not-for-profit area of the business. In June 2016, your firm was approached by Kalina and Reina, two sisters who had benefited from several educational scholarships to complete their engineering program. You and one of the partners recently met with the sisters to obtain additional information.
After five years of working, the sisters have decided to start a charity to raise funds for one scholarship at a time. Together with their friend Albert, they incorporated the organization called MyScholar.Org (MSO) under the Canada Not-for-profit Corporations Act and have come to your firm for advice on becoming a charitable organization.
The purpose of MSO as stated in its application to register a charity for income tax purposes is “to provide scholarships.” Once the charity status is approved, Kalina, the managing director, plans to make a personal donation to MSO in Year 1 in the amount of $60,000. Her donation will be invested in marketable securities, the full income of which will be used to cover operating expenses. Over the years, Kalina has been saving a portion from her income and this will be the first time that she makes a donation to a charity. Kalina earns $60,000 per year from her current employment and she has no other source of income. She has asked you to give her an estimate of the tax refund that she could receive as a result of her donation. 
Reina and Albert also committed to contribute $50,000 each. During Years 1 and 2, they intend to focus their efforts on fundraising through social media. They hope to raise at least $100,000 in donations from the public each year. Their college friend agreed to design MSO’s website and manage its social media accounts in exchange for a $5,000 tax receipt. The organization also plans to solicit laptops from local computer manufacturing companies to be donated to deserving university students.
In Year 3, MSO expects that its operating costs will be scholarship grants of $8,000, laptops with approximate costs of $3,000 and marketing expenses of $3,000.
Recently, their other friend whose daughter will be going to university in three years has approached Kalina and indicated that once the charity is registered, he will commit to give $30,000 to MSO with instructions to invest the money and then pass it back to his daughter in Year 3. He hopes to receive a tax receipt. 
Kalina also wants to know the level of financial review that will be required on the financial statements to ensure regulatory compliance.
Required:
Prepare a report to the partner commenting on Kalina, Reina and Albert’s plans, including a list of recommended changes to their application for registered charity status and their planned approach to operating MSO. You should also address any other issues raised in the case. For purposes of calculation, do not account for the contingent donation of $30,000 from their friend.