P. 3-1 ts acrual based budgeting preferable to cash-based budgeting? The Disability Research Institute receives its funding mainly from governme contributions. In turn, it supports research and related projects carried out by universitie for-profits. Most of its government grants are reimbursement (expe government will reimburse the institute for the funds that it disburses to others. nditure-driven) awards. That is, the The institute estimates that the following will occur in the forthcoming year: ded $5 million in government grants, all of which will be paid out to subrecipients during the year. Of this amount, only $4.5 million will be reimbursed by the government during the year. The balance will be reimbursed in the first six months of the next year. The institute will also receive $200,000 in grant funds that were due from the previous year. It will receive $600,000 in pledges from private donors. It expects to collect $450,000 during the year and the balance in the following year. It also expects to collect $80,000 in pledges made the prior year. It will purchase new furniture and office equipment at a cost of $80,000. It currently owns its building, which it had purchased for $800,000, and additional furniture and equipment, which it acquired for life of five years forthcoming year and the balance in the next year. S20,000 in the next year. It will also pay another $10,000 in costs incurred in the previ $250,000. The building has a useful life of twenty-five years; the furniture and equipment have a useful Employees will earn wages and salaries of $340,000, of which they will be paid $320,000 during the It will incur other operating costs of $90,000, of which it will pay $70,000 in the forthcoming year an