4 ABC Foundation held a fundraising campaign that resulted in ten donors making the following unconditional promises to give: Donor Amount Pledged (per year) 50,000.00 10,000.00 5,000.00 100,000.00 25,000.00 15,000.00 22,538.00 35,000.00 459,682.00 239,485.00 14 15 8 9 10 All amounts will be given per year over a total of five years. Based on prior experience and the current economic climate, the Foundation determines that 5% of the pledges will not be collected. The Foundation will also use 5% as the discount rate. 18 19 20 21 22 23 Requirements: (1) Prepare a schedule showing the amount each donor will give in the current year and for the remaining four years. (2) Using the schedule prepared in #1, calculate the following: a. The estimated amount uncollectible for the current year. b. The estimated amount uncollectible for future years. c. Calculate the present value of the total amount pledged. d. Calculate the discount on the pledges. 35 36 37 38 39 (3) Prepare a journal entry to record the following: a. Current pledges receivable and the associated allowance for uncollectible amounts b. Long-term pledges receivable and the associated allowance for uncollectible amounts. C. The discount d. Contributions revenue Note: Since this is the first year of the pledges, the Foundation will elect to reduce contributions revenue by the amount estimated to not be collected. (4) 41 Assume that the estimated current year pledges after the allowance were 100% received in year 1. Calculate the following for year 2: a. Pledges receivable for the current year. b. Pledges receivable due in future years. C. The estimated amount uncollectible for the current year. d. The estimated amount uncollectible for future years. e. Calculate the present value of the total amount remaining to be collected. f. Calculate the discount on the pledges. 46 (5) 50 51 Prepare a journal entry to record the following for year 2: a. Current pledges receivable and the associated allowance for uncollectible amounts b. Long-term pledges receivable and the associated allowance for uncollectible amounts. c. The discount d. Contributions revenue