A private,not-for-profit hospital received a contribution of $40,000 on June 15,2008.The donor restricted the contribution to funding research activities currently being performed by the hospital.For the year ended December 31,2008,the hospital spent $30,000 of the contribution on research activities.The hospital expended the remaining $10,000 on research activities in January of 2009.
-Refer to the above information.On the statement of changes in net assets prepared for the year ended December 31,2008,the events described would

Question

Quizplus · Accepted Answer

The contribution received is restricted, meaning it cannot be used for general operations or any other purpose besides funding the research activities specified by the donor. Therefore, the $40,000 contribution would increase temporarily restricted net assets by $40,000. When $30,000 is spent on research activities during the year, temporarily restricted net assets would decrease by $30,000. However, since the remaining $10,000 is spent on research activities in January of 2009, it would not affect the year ended December 31, 2008. Therefore, the events described would increase temporarily restricted net assets by $10,000 for the year ended December 31, 2008.

A Private,not-For-Profit Hospital Received a Contribution of $40,000 on June