KTA is an NFP that operates an animal shelter and commenced operations in 20X9. KTA has a December 31 year-end. In 20X9, KTA received $1.5 million to build a new shelter, which was completed in October 20X9. The shelter is expected to have a useful life of 40 years. This was financed with $800,000 of private donations and $700,000 of government grants. In addition, $150,000 was provided in government grants on October 1, 20X9, to fund two veterinarians for the next 12 months. Two veterinarians were hired October 1, 20X9, at an annual salary of $120,000 each. The organization is expected to generate $1,250,000 in annual revenues. During the period October 1 to December 31, KIA received donations of $275,000 and paid out operating expenses of $235,000. KIA uses the deferral method and does not have a separate capital fund. How much is the balance of deferred contribution account as of December 21, 20X9?

Question 5Answer

a.

$1,620,625

b.

$40,000

c.

$1,580,625

d.

$130,000

e.

None of the other options are correct.