Question

In the current year, the not-for-profit organization (NFP) How to Read Government Financial Reports received both cash of $1,000 and pledges of $2,000 to be used for teaching citizens how to read government financial reports. During the year the organization spent $1,500 teaching citizens to read financial statements. Assuming the NFP has a policy of spending its restricted resources first, in the current year what amount of contributions can be reclassified as unrestricted

Answer 1

$ 1,000

Step-by-step explanation:

When the NFP organizations spends any amount of money for the purpose of an external donor that is intended, the expense is reported as the decrease in the unrestricted of net assets.

In the context, it is given that cash received = $ 1000

Pledges to be used for the teaching citizens for the financial reports = $ 2,000

Amount spent by the organization = $ 1500

Therefore, as per the policy of the spending in the restricted resources, the amount of contributions in the current year that can be reclassified as unrestricted amount = $ 1,000.00