C is corrent. Donor restricted contributions should be reported as revenue on the date received. These contributions should be reported as temporarily restricted revenues until reclassified and expended. For the year ended December 31, year 1, the $5,000 from the alumni is restricted to research and $35,000 is restricted until July of year 2 . Thus, this answer is correct ($35,000 + $5,000 = $40,000).
A is incorrect because for the year ended December 31, year 1, the $5,000 from the alumni is restricted to research and $35,000 is restricted until July of year 2 .
B is incorrect because for the year ended December 31, year 1, the $5,000 from the alumni is restricted to research and $35,000 is restricted until July of year 2 .
D is incorrect because for the year ended December 31, year 1, the $5,000 from the alumni is restricted to research and $35,000 is restricted until July of year 2 .
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