Which of the following statements is correct for 2020?

1. Pledges receivable is reported under current assets on the statement of financial position

at December 31, 2020.

2. Unearned revenue is reported under current liabilities on the statement of financial

position at December 31, 2020.

C. A and B.

D. Neither A nor B.

1. Margaret Smith donated $100,000 to a voluntary health and welfare organization in 2021. Ms. Smith restricted the donation to the acquisition of capital assets. In 2022, the nonprofit entity acquired $80,000 of equipment using Ms. Smiths donation. The equipment has a useful life of 8 years and no residual value. The nonprofit uses straight-line depreciation for all of its capital assets and has a policy of taking a full years depreciation in the year of acquisition. For the year ended December 31, 2021, which of the following statements is correct?

1. Net assets with donor restrictions increased $100,000.
2. Net assets without donor restrictions were not affected.
3. A and B.
4. Neither A nor B.

2. Refer to the previous question. Which of the following statements is correct for the year ended December 31, 2022?

1. Net assets with donor restrictions decreased $80,000.
2. Net assets without donor restrictions increased $70,000.
3. A and B.
4. Neither A nor B.