Active TopicsActive Topics  Display List of Forum MembersMemberlist  Search The ForumSearch  HelpHelp
  RegisterRegister  LoginLogin
FAR STUDY GROUP
 CPAnet Forum : FAR STUDY GROUP
Subject Topic: Governmental -CPA-05209 (Topic Closed Topic Closed) Post ReplyPost New Topic
  
Author
Message << Prev Topic | Next Topic >>
Xalina
Regular
Regular


Joined: 14 Sep 2009
Location: United States
Online Status: Offline
Posts: 183
Posted: 20 Sep 2009 at 15:12 | IP Logged  

During the current year, a voluntary health and welfare organization receives $300,000 in unrestricted pledges.  Of this amount, $100,000 has been designated by donors for use next year to support operations.  If 15% of the unrestricted pledges are expected to be uncollectible, what amount of unrestricted support should the organization recognize in its current-year financial statements?

a.    $300,000
b.    $270,000
c.    $200,000
d.    $170,0Answer

Choice "d" is correct.  The unrestricted support, net of expected uncollectibles, recognized in the current year financial statements is $170,000.  Although $300,000 was pledged, 15% are anticipated to be uncollectible and $100,000 is effectively temporarily restricted by the time restriction limiting the use of the funds to the following year.  The $200,000 ($300,000 - $100,000) of unrestricted current year pledges, reduced by $30,000 (15% of $200,000) is $170,000 ($200,000 - $30,000).
Choice "a" is incorrect.  This answer incorrectly includes the entire amount pledged and ignores the $30,000 estimate of uncollectibility.
Choice "b" is incorrect.  This answer incorrectly includes the entire amount pledged for current year recognition as unrestricted but does subtract the $30,000 estimate of uncollectibility.
Choice "c" is incorrect.  This answer includes only the unrestricted pledges but does subtract the estimate of uncollectibility.


My Question is:  All Pledges have an implied time restriction and are therefore Temp restricted. No?

 I seem to getting all the silly ones wrong. I did manage to score 86 on this section but this area still confuses me!!


__________________
Becker all the way!
FAR- 10/09/09-88
AUD- 11/24/09-91
REG- 01/22/2010- 94
BEC- 03/01/2010-90
I came, I saw, I calculated!
Back to Top View Xalina's Profile Search for other posts by Xalina
 
bryris
Major Contributor
Major Contributor


Joined: 07 Dec 2008
Location: United States
Online Status: Offline
Posts: 624
Posted: 20 Sep 2009 at 16:01 | IP Logged  

If not specifically restricted by the donor, a pledge is unrestricted. This question does seem strange in that it says that 300,000 is unrestricted, then goes on to say that 100,000 is donor restricted.

In the end though, 100,000 is no longer unrestricted. Thus, 200,000 is unrestricted, less the 15% collectible. Pledges are recorded at their fair value, accordingly, these numbers are netted and the answer is 170,000.


__________________
REG - 97
FAR - 97
BEC - 90
AUD - 97
Back to Top View bryris's Profile Search for other posts by bryris Visit bryris's Homepage
 
Xalina
Regular
Regular


Joined: 14 Sep 2009
Location: United States
Online Status: Offline
Posts: 183
Posted: 20 Sep 2009 at 20:59 | IP Logged  

 I'm still not quite clear on this.

See Pg F9-56. Why does the JE classify the revenue as Temp Restricted?

Thanks for replying. You are awesome!

__________________
Becker all the way!
FAR- 10/09/09-88
AUD- 11/24/09-91
REG- 01/22/2010- 94
BEC- 03/01/2010-90
I came, I saw, I calculated!
Back to Top View Xalina's Profile Search for other posts by Xalina
 
bryris
Major Contributor
Major Contributor


Joined: 07 Dec 2008
Location: United States
Online Status: Offline
Posts: 624
Posted: 20 Sep 2009 at 22:42 | IP Logged  

I'm a Gleim user so can't refer to Becker stuff. What does it say?

__________________
REG - 97
FAR - 97
BEC - 90
AUD - 97
Back to Top View bryris's Profile Search for other posts by bryris Visit bryris's Homepage
 
Xalina
Regular
Regular


Joined: 14 Sep 2009
Location: United States
Online Status: Offline
Posts: 183
Posted: 20 Sep 2009 at 23:18 | IP Logged  

oh sorry! Here is how its presented

Unrestricted Contributions

Unconditional promises to contribute in the future are reported as restricted support ( Implied time restriction), at Present value of the estimated future cash flows ....

The JE is
DR Pledge receivable
CR     Allowance for doubtful accounts
CR     Contributed Revenue-Temporarily restricted revenue

I hope I'm not wasting too much of your time..




__________________
Becker all the way!
FAR- 10/09/09-88
AUD- 11/24/09-91
REG- 01/22/2010- 94
BEC- 03/01/2010-90
I came, I saw, I calculated!
Back to Top View Xalina's Profile Search for other posts by Xalina
 



Sorry, you can NOT post a reply.
This topic is closed.


  Post ReplyPost New Topic
Printable version Printable version

Forum Jump
You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot delete your posts in this forum
You cannot edit your posts in this forum
You cannot create polls in this forum
You cannot vote in polls in this forum

Powered by Web Wiz Forums version 7.9
Copyright ©2001-2010 Web Wiz Guide

This page was generated in 0.1094 seconds.

Copyright 1996-2016 CPAnet/MizWeb Communities All Rights Reserved
Twitter
|Facebook |CPA Exam Club | About | Contact | Newsletter | Advertise & Promote