Which is recorded by the private not-for-profit entity

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Problem 1: George H. Ruth takes a leave of absence from his job to work full time for a charity for six months. Ruth fills the position of finance director, a position that normally pays $88,000 per year. Ruth accepts no remuneration for his work. What recording does the charity make?

Multiple Choice

Option 1: As contribution revenue of $44,000 and salary expense of $44,000.
Option 2: No entries should be made because no cash was paid or received.
Option 3: As a contribution revenue of $44,000 only.
Option 4: As a deferred revenue of $44,000.

Problem 2: The Houston Corporation signs a formal pledge to give $100,000 in cash to a private not-for-profit entity within the next year. The money must be spent to upgrade important equipment used by the charity. The pledge is judged to be a conditional contribution. Which of the following is recorded by the private not-for-profit entity for this pledge?

Multiple Choice

Option 1: A liability
Option 2: No journal entry is made.
Option 3: Contributed revenue reported within net assets with donor restrictions
Option 4: Contributed revenue reported within net assets without donor restrictions

Reference no: EM132949052

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