Determination of Contribution RevenueAtwater Health Services, a voluntary health and welfa...

Determination of Contribution Revenue

Atwater Health Services, a voluntary health and welfare organization, has provided support for families with low income in the town of Atwater for approximately 20 years. In 20X6, Atwater Health Services conducted a major funding campaign to help replace facilities that are no longer adequate and to generate operating and endowment funds.

The community of Atwater ran a number of special events, and the chamber of commerce made the fund-raising campaign a major activity for 20X6. In 20X6, the following gifts and pledges were received:

1. The family of I. B. Plentiful donated a lot adjacent to the current building for future use as a playground and parking lot. The family had purchased the lot for $22,000 several years ago. It had a current value of $42,000 at the date contributed.

2. A number of new pledges were received and many were partially or fully paid in 20X6. The following information was compiled:

3. Also during 20X6, $45,000 was spent in providing vision tests for grade school children. A total of $38,000 of funds collected in 20X4 and 20X5 for this purpose were used to help pay for the costs of providing the tests free of charge to all children in the community.

Required

a.    Prepare thejoumal entries for 20X6 for these activities, including receipt of the first installment on the pledge for building construction, which was received at the end of 20X6. Atwater currently earns an 8 percent return on its investments. The present value of the seven future payments of $50,000 is $260,318.

b.Prepare thejournal entry or entries recorded atthe end of20X7 uponreceipt of the secondpayment on the pledge for building construction.