Catherine College, a private not-for-profit college, received
the following contributions during 2012:
I. $5,000,000 from alumni for construction of a new wing on
the science building to be constructed in 2012.
II. $1,000,000 from a donor who stipulated that the contribution
be invested indefinitely and that the earnings be used
for scholarships. As of December 31, 2012, earnings from
investments amounted to $50,000.
For the year ended December 31, 2012, what amount of these
contributions should be reported as temporarily restricted revenues
on the statement of activities?

(b) Contributions should be reported as revenues in the
period received, even though donors have placed time or use
restrictions on the contributions. The $5,000,000 contribution
from alumni for a new wing for the science building should be
reported as a temporarily restricted revenue on the statement of
activities for the year ended December 31, 2012. Also, the
$50,000 of earnings related to the investments should also be
reported as temporarily restricted revenues on the statement of
activities for the year ended December 31, 2012. The $1,000,000
contribution from the donor, who stipulated that the contribution
be invested indefinitely, should be reported as a permanently
restricted revenue on the statement of activities for the year
ended December 31, 2012.