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Pledges must be distinguished by the extent to which they are restricted. A private college receives the following pledges of support. Current Loan Endowment Plant

Pledges must be distinguished by the extent to which they are restricted. A private college receives the following pledges of support. Current Loan Endowment Plant Total

1. As part of its annual fund drive, alumni and friends of the college pledge $8 million. The college esti- mates 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.

3. A private foundation promises to donate $100,000 to be used to support a major revision of the col- leges 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 fieldhouse. A local real estate investor promises to donate 10 acres of land on which a fieldhouse 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.

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 24537 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

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