During the current year, a voluntary health and welfare organization receives $800,000 in nonrestricted pledges. Of this amount, $300,000 has been designated by donors for use next year to support operations in the pharmacy. If 20 percent of the nonrestricted pledges are expected to be uncollectible, what amount of nonrestricted support should the organizations recognize in its current-year financial statements?

Question

Quizplus · Accepted Answer

The organization should recognize $400,000 as nonrestricted support in the current year. This is calculated by taking the total nonrestricted pledges ($800,000) and subtracting the amount designated for next year ($300,000), resulting in $500,000. Then, accounting for the 20% expected to be uncollectible, $500,000 x 80% = $400,000.

During the Current Year, a Voluntary Health and Welfare Organization