Turner Fund, a voluntary health and welfare organization funded by contributions from the general public, received unrestricted pledges of $300,000 during 20X4. It was estimated that 10 percent of these pledges would be uncollectible. By the end of 20X4, $240,000 of them had been collected. It was expected that $35,000 more would be collected in 20X5 and the balance of $25,000 would be written off as uncollectible. What amount should Turner include as contribution revenue in 20X4

a. $300,000

b. $275,000

c. $270,000

d. $240,00

Question

Business

Kathryn

25 November, 11:29

Turner Fund, a voluntary health and welfare organization funded by contributions from the general public, received unrestricted pledges of $300,000 during 20X4. It was estimated that 10 percent of these pledges would be uncollectible. By the end of 20X4, $240,000 of them had been collected. It was expected that $35,000 more would be collected in 20X5 and the balance of $25,000 would be written off as uncollectible. What amount should Turner include as contribution revenue in 20X4

a. $300,000

b. $275,000

c. $270,000

d. $240,00

+3

Answers (1)

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Isabelle Case · Answer 1

option (c) $270,000

Explanation:

Data provided in the question:

Total pledges received = $300,000

Allowance for doubtful accounts = 10% of the total

Pledges collected by the end of the year = $240,000

To be collected in the year 20X5 = $35,000

Balance written off as uncollectible = $25,000

Now,

Contribution revenue in 20X4

= Total pledges - Allowance for doubtful accounts

= $300,000 - (10% of $300,000)

= $300,000 - $30,000

= $270,000

Hence,

The correct answer is option (c) $270,000