[karldereta]

When part of the unrestricted pledges received is restricted for next year, do you take the uncollectible amount (amount * % uncollectible) and subtract it from the CURRENT year pledges AND NEXT year’s (in proportion to the amount of pledges for that year)?

[Anonymous]

Unrestricted pledges are never restricted

Revenue is earned when pledge is made ….

[karldereta]

Ohhh, sorry I might have worded it wrong, but the question stated that the entity donating the pledges restricted a certain amount say $100,000 of $300,000 for next year… The MC question stated that it was 15% uncollectible, so the right answer was for $30,000 uncollectible for current year but didn't specify for left over $100,000 for next year… Another question did this but the opposite so I just wanted to confirm

[Anonymous]

treat thsi as normal AR. something that belongs to next year is unearned income so it should be deferred credit.

The current year noncollectable expense should be 200,000*.15= 30,000

BTW- good luck with FAR, you can do it!!

[Author]

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