1. Seoul Specialty Hospital (SSH) has just purchased a five-year membership in the Korean Hospital Association (KHA). The membership costs $10,000 and KHA has sent SSH a bill that must be paid within ninety days. How would SSH record this transaction. (Hint: Be sure to distinguish between the long and short term aspects of the transaction.)

Assets = Liabilities + Net Assets

Prepaid Membership Deferred Membership Accounts payable

+$2,000+ $8,000 +$10,000

Isthe answer right?

2. KUC has just completed its annual fund-raising drive. It received $1,750,000 of pledges. $750,000 was paid to KUC either in cash or by credit card. KUC sent invoices to the remaining donors. From past experience, KUC knows that 15% of these pledges will never be received. How would KUC record this transaction?

Aseets = Liabilities + Net Aseets

Pledge ReceivableSupport

+$1,750,000 +$ 1,750,000

Cash Pledge Receivable

+$1,750,000 -$1,750,000

Allowance for Uncollectible PledgesBad debt expense

-$262,500 -$262,500

Is the answer right?

3. KUCs policy is to write off any uncollected pledges from prior years campaigns at the completion of the next years annual appeal. At the end of this years campaign, there was $275,000 worth of uncollected pledges from last years appeal. How would KUC record this in its accounts?

Assets = Liabilities + Net Assets

Pledge receivable Allowance for Uncollectible Pledges No change on right side

-$275,000 +$ 275,000

is the answer right?