Response to the following problem:
Three wealthy friends, Tom, Grant, and Karen, each decided to donate $5,000,000 to the not-for-profit organization of their choice. Each donation was made on May 21, 2011.
Prepare the entries required for each of the recipient organizations under the following scenarios.
1. Tom chose to contribute to a local voluntary health and welfare organization, and no restrictions were placed on the use of the donated resources.
a. Prepare the May 21, 2011, entry.
b. Prepare any entries necessary in 2012 if $2,300,000 of the gift is used to finance operating expenses.
2. Grant contributed to a local private university, and the donation was restricted to research.
a. Prepare the May 21, 2011, entry.
b. Prepare any entries necessary in 2012 if $2,300,000 of the gift is used to finance research expenses.
3. Karen gave to the local hospital, and the donation was restricted for construction of a fixed asset.
a. Prepare the May 21, 2011, entry.
b. Prepare any entries necessary in 2012 if $2,300,000 of the gift is used to finance construction costs.