The Following Information Applies to the Next Three Questions

question 18

Multiple Choice

The following information applies to the next three questions:
A private foundation made a multi-year pledge to a private college on December 31, 2014, the last day of the fiscal year. The pledge was to pay $15,000 per year each year for five years, beginning on December 31, 2015. The discount rate is 6%. The present value of five payments of $15,000 is $63,185. The present value of four payments of $15,000 is $51,977. No purpose or plant restrictions were involved.
-The private college would:

• A) Record contribution revenue in the amount of $15,000 in each of the years 2015, 2015, 2015, 2015 and 2016.
• B) Record contribution revenue in the amount of $63,185 in 2014.
• C) Record contribution revenue in the amount of $51,977 in 2015.
• D) None of the above

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Definitions:

Register

To record or enroll officially, such as a name or information, in a list, directory, or database.

S Corporation

A special designation of corporation that allows for pass-through taxation, where the corporation's income is taxed at the shareholder level, rather than at the corporate level.

Shareholders

Individuals or entities that own shares in a corporation, giving them a claim on part of the corporation's assets and earnings.

U.S. Citizens

Individuals who possess citizenship of the United States, either by birth or naturalization.