Use the following information for questions 118 and 119:

Town Service Center is a voluntary health and welfare organization funded by contributions
from the general public. During 20x6, unrestricted pledges of P800,000 were received, half of
which were payable of these pledges would be uncollectible. In addition, Helen Ladd, a social
worker were on Town’s permanent staff, earnings P30,000 annually for a normal workload of
P1,500 hours, contributed on additional 600 hours of her time to Town at no charge.
1. How much should Town report as unrestricted contribution revenue for 20x6 with respect
to the pledges?
a. P0
b. P360,000
c. P720,000
d. P800,000
2. How much should Town record in 20x6 for contributed service expenses?
a. P0
b. P1,200
c. P10,000
d. P12,000
Use the following information for questions 120 to 123:
On January 1, 20x2, State Center Health Agency, a voluntary health and welfare organization,
received a bequest of a P200,000 certificate of deposit maturing on December 31, 20x6. The
contributor’s only stipulations were that the certificate be held to maturity and the interest
revenue received annually be used to purchased books for the children to read in the preschool
program run by the agency. Interest revenue each of the years was P9,000 and the full P9,000
was spent for books each year. When the certificate was redeemed, the board of trustees adopted
a formal resolution designing P150,000 of the proceeds for future purchase of playground
equipment for the preschool program.
3. What amount should be reported in the 20x2 statement of activities for the unrestricted
fund?
a. Legacies and bequest of P200,000
b. Investment income of P9,000
c. Transfers to unrestricted fund P9,000
d. All of the above

4. What amount should be reported in the 20x2 statement of activities for the unrestricted
fund?
a. Legacies and bequest of P200,000
b. Investment income of P9,000
c. Transfers from the restricted fund P9,000
d. Contributions of P209,000

5. What should be reported in the 20x6 statement of activities for the unrestricted fund?
a. Transfers from restricted fund P209,000
b. Investment income of P9,000
c. Transfers from the restricted fund P9,000
d. Contributions of P209,000

6. What should be reported in the December 31, 20x6, statement of financial position for
restricted funds?
a. Liability for purchase of playground equipment, P150,000
b. Due to plant and equipment fund, P150,000
 c. Board-designated funds, P150,000
d. Temporarily restricted funds, P200,000

7. A voluntary health and welfare organization reports pledges receivable on its statement of
financial position at the present value of the future cash collections. How is the increase
in the present value of the pledges receivable, which is due to the passage of time,
reported on the voluntary health and welfare organization’s statement of activities?
a. As interest income-temporarily restricted
b. As an increase in pledges receivable-temporarily restricted
c. As an increase in contributions-temporarily restricted
d. As an increase in deferred revenue-temporarily restricted