Reference no: EM132949057

Problem 1: A local private not-for-profit entity receives a large monetary pledge. Accountants are attempting to determine if the contribution is conditional. They are assessing the possible existence of a barrier that has to be overcome. Which of the following is not an indication of a barrier of this type?

Multiple Choice

Option 1: Measurable performance related barrier
Option 2: Stipulation limiting discretion by the recipient on the conduct of an activity
Option 3: Requirement preventing the money from being spent until a specific date in the future
Option 4: Stipulation that ties into the agreement

Problem 2: AB is a private not-for-profit entity. It acquires YZ, another private not-for-profit entity. The acquisition price is $1.04 million. YZ has net assets with a net book value of $604,000 but a fair value of $708,000. Officials for AB expect that the primary support for YZ in the future will be contributions. After the acquisition, what amount of goodwill will be reported on the consolidated balance sheet?

Multiple Choice

Option 1: $-0-
Option 2: $104,000
Option 3: $332,000
Option 4: $376,000