Not-For-Profit Accounting Memo – Assignment Example
May 3, Re: Binky’s Pregnancy Shedd Aquarium will be adding a new addition to the animal population next year in the spring. Binky the dolphin is pregnant. The implications of this pregnancy and birth have to be put into accounting terms. While the birth will not be used until the next fiscal year, other implications this year must be accounted for. The purpose of this memo is to detail the financial aspects of Binky being pregnant.
Binky’s pregnancy does impact this fiscal year. Shedd Aquarium is a non-profit. All money
received is put back into the aquarium. Binky is one half of the pair of dolphins that performs
two shows a day on the weekends during the off season, and two shows daily during the summer.
For the rest of this year, the veterinarian has recommended Binky not be put through the stress of the shows. This makes Binky’s value depreciated for the period of her pregnancy. This is especially true when it comes to selling Binky. Since she is pregnant, the stress of selling her would make her lose the baby. No aquarium would buy her at this time. In the meantime, Binky will consume more food. This makes her a liability.
Until the time of the birth, Binky will be a liability. After the birth, Binky and her baby will be assets. More individuals will come to see the new baby. The mother and baby will have a value cost on the balance sheet. If two babies are born, then all three will have a set value. The set value will be separate and intertwined. This is due to the early separation of the baby/babies from the mother would lead to their deaths. The shock could even kill Binky. On the other hand, mother and baby/babies will create more revenue for the Shedd Aquarium. Binky and her baby/babies are inventory.
The above scenario will happen if the baby is born healthy. Other possibilities like the baby being born dead, a miscarriage, or if the birth kills Binky can occur. This will mean a loss in current and potential inventory. It will also cost to buy another dolphin to partner with the current male dolphin. Since this is a non-profit, these circumstances need to be planned in advance. While the Shedd Aquarium hopes that Binky’s baby becomes part of the inventory and lives a long life, the situation does not always work out that way.
Binky’s pregnancy needs to be taken into consideration this fiscal year and for the next fiscal year. The depreciation of Binky needs to be taken into account. The new asset in the aquarium’s inventory next year needs to be prepared for. Many accounting issues need to be examined and addressed in order for the aquarium needs to be met.
Thank you for your consideration.