At the beginning of the current year, a donor gave a private NFP organization $ 1 0
Question:
At the beginning of the current year, a donor gave a private NFP organization $ 1 0 0 , 0 0 0 in cash, with the provision that the cash be invested in income - producing securities . The center is to pay the donor $ 3 , 0 0 0 at the end of each year for his remaining life. Upon his death, remaining resources become available to the center with no restrictions as to use. The center invested the $ 1 0 0 , 0 0 0 in securities earning cash dividend and interest income of $ 3 , 5 0 0 in the current year. The securities have a fair value of $ 1 0 2 , 0 0 0 at the end of the year. The donor 's life expectancy is 1 0 years, and the annual discount rate is 4 % . The present value of $ 1 / year for 1 0 years, discounted at 4 % , is $ 8 . 1 1 .
The increase in the net assets with donor restrictions due to contribution revenue for the first year is
75,670
72,670
79,170
100,000
Accounting for Governmental and Nonprofit Entities
ISBN: 978-1259917059
18th edition
Authors: Jacqueline L. Reck, James E. Rooks, Suzanne Lowensohn, Daniel Neely