The Yelton Center is a voluntary health and welfare entity. During 2017, unrestricted pledges of $780,000 were received by the Yelton Center, sixty percent of which were fulfilled in 2017. Officials estimated that fifteen percent of the original amount of pledges will be uncollectible. The remainder of the amount expected to be collected from pledges will be received in 2018 (for use in 2018).Required:1) Show with appropriate amounts how the Yelton Center would present the pledges on its Statement of Financial Position on the day the pledges are recorded in 2017.2) Show with appropriate amounts the effect on net assets the Yelton Center would report for contributions for 2017.
What will be an ideal response?
| 1) | Contributions receivable | $ | 780,000 | |
| Allowance for uncollectible pledges (15%) | (117,000 | ) | ||
| Net realizable value of pledges | $ | 663,000 | ||
| 2) | Increase in unrestricted net assets in 2017 - contributed support (60% x $780,000) | $ | 458,000 | |
| Increase in temporarily restricted net assets in 2017 - contributed support (Net amount expected to be collected of $663,000 less amount collected and released from restriction in 2017 of $458,000) | $ | 205,000 | ||
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