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10–8. Cancer Research Center

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10–8. On January 1, 2012, a foundation made a pledge to pay $30,000 per year at
the end of each of the next five years to the Cancer Research Center, a nonprofit
voluntary health and welfare organization as a salary supplement for a
well-known researcher. On December 31, 2012, the first payment of $30,000
was received and paid to the researcher.

1. On the books of the Cancer Research Center, record the pledge on
January 1 in the temporarily restricted asset class, assuming the appropriate
discount rate is 5 percent on an annual basis. The appropriate discount
factor is 4.33.

2. Record the increase in the present value of the receivable in the temporarily
restricted net asset class as of December 31.

3. Record the receipt of the first $30,000 on December 31 and the payment
to the researcher. Indicate in which asset class (unrestricted, temporarily
restricted) each account is recorded

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