Exercise 2 (LO 4, 6) Contributions, statement of activities. Early in 2018, a no

Question

Exercise 2 (LO 4, 6) Contributions, statement of activities. Early in 2018, a not-for- profit organization received a $4,000,000 gift from a wealthy benefactor. This benefactor speci- fied that the gift be invested in perpetuity with income restricted to provide speaker fees for a lecture series named for the benefactor. The not-for-profit is permitted to choose suitable investments and is responsible for all other costs associated with initiating and administering this series. Neither the donor's stipulation nor the law addresses gains and losses on this permanent

Explanation / Answer

1. The receipt of $4,000,000 gift will be recorded as Permanently restricted asset because of the permanent restriction in gift.

2.Dividend income of $100,000 will be recorded as temporarily restricted net assets.

3.Unrealised gain of $300,000 will be recorded as Unrestricted net assets.

4.$100,000 in dividend increase will be recorded as temporarily restricted item, as lecture series is not to begin until 2019

5.Unrealised gain of $300,000 will be recorded as temporarily restricted net assets.

Related Questions

Navigate

• Browse (All)
• Browse E
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.