1. In 2014, a major drug company agreed to give a not-for-profit private college $1,700,000 to perform testing of a new drug. An advance payment of $700,000 was received in 2014. The college was to receive $4,000 per individual test. In 2014, the college completed 100 tests. How much revenue should the college report for 2014?

A) $ - 0 - .

B) $ 400,000.

C) $ 700,000.

D) $1,700,000.

Answer: B please show the calculations

2. A private foundation made a multi-year pledge to a private college on December 31, 2013, the last day of the fiscal year. The pledge was to pay $12,000 per year each year for five years, beginning on December 31, 2014. The discount rate is 6%. The present value of five payments of $12,000 is $50,548. The present value of four payments of $12,000 is $41,581. No purpose or plant restrictions were involved.

1. The private college would:

A) Record interest revenue of $3,033 in 2013.

B) Record interest revenue of $3,033 in 2014.

C) Record contribution revenue of $3,033 in 2013.

D) Record contribution revenue of $3,033 in 2014.

Answer: D Show the calculation