A benefactor promises to donate $30,000 to his church toward the purchase of a new piano if the church is able to raise matching funds of $30,000 from other contributors. At what point should the church record revenue?
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The promise is contingent upon the church raising matching funds of $30,000 from other contributors. Show more…
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in general revenue is recognized when
Hoan N.
The Willson Center is a private not-for-profit entity. During 2020, it received pledges of $600,000 that it expects to collect during 2021. Of that amount, 10 percent is viewed as conditional. Of the rest, $300,000 must be used for automotive equipment for the NFP. In addition, $50,000 is set aside by the entity's board of directors for emergencies. The donor stipulates that another $100,000 be held permanently with all subsequent income used to buy food for hungry children. The remainder of the pledges are not restricted in any way. Of the unrestricted pledges, $5,000 is expected to prove uncollectible. In addition, a local social worker, earning $30 per hour working for the state government, contributes 600 hours of time to the Willson Center. Without these donated services, the organization would have had to hire an additional staff person. Answer the following questions. a. What is meant by conditional pledges? How are conditional pledges reported? b. What is the reporting of the $300,000 in pledges for automotive equipment when the pledge is received? When the money is collected? When the money is properly spent assuming the donor made no stipulation about reporting? c. What is the reporting of the $50,000 set aside by the entity's board of directors for emergencies? d. What is the reporting of the $100,000 to be permanently held with the income used to buy food for hungry children? What is the reporting when income is earned? What is the reporting when this income is spent as stipulated? e. What is the reporting of the remaining pledges that are not restricted? What is the reporting of the bad debt amount? f. Should the donated services be reported? If so, why? g. If the donated services should be reported, what is the appropriate journal entry?
Akash M.
Investing a Building Fund A church building fund has invested some money in two ways: part of the money at $3 \%$ interest and four times as much at $2.75 \% .$ Find the amount invested at each rate if the total annual income from interest is $\$ 2800$.
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