On December 30, 2005, Leigh Museum, a not-for-profit organization, received a $7,000,000 donation of Day Co. shares with donor-stipulated requirements as follows:

Shares valued at $5,000,000 are to be sold, with the proceeds used to erect a public viewing building.

Shares valued at $2,000,000 are to be retained, with the dividends used to support current operations.

As a consequence of the receipt of the Day shares, how much should Leigh report as temporarily restricted net assets on its 2005 statement of financial position (balance sheet)?

  1. $0
  2. $2,000,000
  3. $5,000,000
  4. $7,000,000