Gray College,a private not-for-profit institution,received a contribution of $100,000 for faculty research.The donation was received in 20X1 and $80,000 was spent in 20X1.As a result of these transactions,Gray College should report on its 20X1 statement of activities a:
A) $100,000 increase in temporarily restricted net assets.
B) $20,000 increase in temporarily restricted net assets.
C) $80,000 increase in temporarily restricted net assets.
D) $100,000 increase in unrestricted net assets.

Question

Quizplus · Accepted Answer

The $100,000 contribution is considered temporarily restricted until the faculty research is completed. Since $80,000 was spent in 20X1, only $20,000 of the contribution remains temporarily restricted at the end of the year. Therefore, Gray College should report a $20,000 increase in temporarily restricted net assets on its 20X1 statement of activities.

Gray College,a Private Not-For-Profit Institution,received a Contribution of $100,000 for Faculty