Detailed Answer
(a) According to FASB ASC 958, a transfer of assets
with a conditional promise to contribute them shall be accounted
for as a refundable advance until the conditions have been substantially
met. The conditions have been substantially met when
the possibility that they will not be met is remote. In this question,
the chance that the condition will not be met is reasonably
possible, which is a higher level of doubt than remote and thus
results in reporting the cash transfer as a liability at December 31,
2011.