Pledges must be distinguished by the extent to which they are restricted.

A private college receives the following pledges of support.

1. As part of its annual fund drive, alumni and friends of the college pledge $8 million. The college estimates that about 15 percent of the pledges will prove uncollectible.

2. A CPA firm promises to establish an endowed chair in the accounting department by donating $500,000. The chair agreement will provide that the funds be used to purchase investment grade securities and that the income from the securities be used to supplement the salary of the chair holder and support his or her academic activities.

Sundown State University, Fund Balance Sheet (in thousands)

	Current	Loan	Endowment	Plant	Total
Assets
Cash and temporary investments	$18,567	$22,108	$29,611	$10,853	$81,139
Accounts receivable		2,736		45,974	48,710
Inventories	1,990				1,990
Loans to other funds	8,557		6,879		15,436
Land, buildings, and equipment, net of accumulated depreciation				283,181	283,181
Total assets	$29,114	$24,844	$36,490	$340,008	$430,456
Liabilities
Accounts payable	$23,024			$ 1,704	$ 24,728
Loans from other funds		$ 32		15,404	15,436
Bonds payable		24,505		188,466	212,971
Total liabilities	$23,024	$24,537	$ 0	$205,574	$253,135
Net assets	$ 6,090	$ 307	$36,490	$134,434	$177,321
Fund balances
Restricted	$ 4,102		$20,346	$134,434	$158,882
Designated by the university	1,002		10,000		11,002
Unrestricted	986	$ 307	6,144	0	7,437
Total fund balance	$ 6,090	$ 307	$36,490	$134,434	$177,321

3. A private foundation promises to donate $100,000 to be used to support a major revision of the colleges accounting curriculum.

4. An alumnus pledges $25,000 to the colleges loan fund, which is used to make loans to students requiring financial assistance.

5. The college is seeking support for construction of a new athletic field house. A local real estate investor promises to donate ten acres of land on which a field house could be built if the college is able to raise the funds required to construct the building. The land has a market value of $1 million.

Indicate the category of net assets (unrestricted, temporarily restricted, or permanently restricted) in which each of the contributions should be recorded and the amount of revenue, if any, that should be recognized when the pledge was made. Briefly explain your response.