Which entry would be the correct entry to record pledges of $100,000 for a telethon event to raise money for a not-for-profit public television station? The public television entity estimates that 5% of the funds will be uncollectible. DEBIT CREDIT
A) Pledges Receivable $100,000 Unrestricted net assets-contributions $100,000
B) Cash $100,000 Unrestricted net assets-contributions $100,000
C) Pledges Receivable $100,000 Unrestricted net assets-contributions $95,000 Allowance for uncollectible pledges $ 5,000
D) Pledges Receivable $95,000 Unrestricted net assets-contributions $100,000 Allowance for uncollectible
Pledges $5,000
E) Cash $95,000 Unrestricted net assets-contributions $100,000 Allowance for uncollectible
Pledges $5,000

Question

Quizplus · Accepted Answer

Option C is the correct entry to record pledges of $100,000 for a telethon event to raise money for a not-for-profit public television station. Since the public television entity estimates that 5% of the funds will be uncollectible, an allowance for uncollectible pledges of $5,000 needs to be created. Therefore, Pledges Receivable should be debited for $100,000, and Unrestricted net assets-contributions should be credited for $95,000, and Allowance for uncollectible pledges should be credited for $5,000. This entry will accurately record the expected net pledges of $95,000 in the financial statements.

Which Entry Would Be the Correct Entry to Record Pledges