Case A: A NFP entity receives a promise from a collection of donors to give $10,000 in three years. The expected future cash flows to be received from the donors is $7,000. The NFP uses a present value method to estimate fair value. The fair value (or the present value of the future cash flows) is estimated to be $6,100.

Required:

Prepare the journal entry to record the amount of contribution revenue.

Case B: Determine the amount of revenue recognized for each of the following items. Then determine whether the revenue would be classified as net assets with donor restrictions or net assets without donor restrictions.

A. $4,000, services are donated that meet the recognition of services definition.

B. $500 cash received (no restrictions attached).

C. $2,500 of equipment received (no restrictions)

D. $3,000 of unconditional promises to give to support activities.

E. $1,500 cash received. Restricted to $500 for program purposes and $1,000 for acquisition of land.

F. $3,000 of promises to give to program activities.

G. A donor contributes $3,300 cash to set up a donor-restricted endowment fund. The income is restricted to support program activities.

H. A donor contributes cash to set up an annuity trust with a present value of $1,000.

I. A donor contributed $2,000 cash, but the NFP must raise its own $2,000 by the same time next year or the cash must be refunded