You may choose option 1 or option 2, you only have to choose one option
Option 1:
Instructions:
In each of the following scenarios, an organization receives a contribution in-kind. Prepare journal entries, as necessary, to give them accounting recognition. For each, tell why you made an entry or why you did not.
1. A local not-for-profit art museum receives advertising for its yearly benefit from radio station WLOU. The airtime would have cost the museum $1,000.
2. Volunteers for ‘‘Breakfast on Bikes,’’ a voluntary health and welfare organization, deliver hot meals to the elderly three times a week. Each of the ten volunteers works about six hours per week. All of the volunteers have permanent jobs with pay averaging $36.10 an hour.
3. Lynn Simms, a local CPA, maintains the books and records of her church. Although her normal billing rate is $120 per hour, she accepts no payment from the church. She works on church matters approximately four hours a week.
4. A construction company allows a not-for-profit community association to use its bulldozer at no cost to clear land for a new baseball park. If the association had to rent the bulldozer it would have incurred costs of $2,400.
Paper Requirements:
· Submit your responses to the following questions in a 1-2 page document in MS Word. Label each question clearly. Please include computations in a table.
· For written answers, please make sure your responses are grammatically correct and free from spelling errors.
Option 2:
Instructions:
Contributions of long-lived assets may affect more than one type of fund.
Discovery Barn, a not-for-profit science center for children, received a contribution of $30,000 explicitly designated for the acquisition of computers. During the year it acquired $21,000 of computers, which it estimated to have a useful life of three years. It is the policy of the organization to charge an entire year’s depreciation in the year of acquisition.
Prepare all required journal entries, being certain to indicate the type of fund in which each entry would be made.
Paper Requirements:
· Submit your responses to the following questions in a 1-2 page document in MS Word. Label each question clearly. Please include computations in a table.
· For written answers, please make sure your responses are grammatically correct and free from spelling errors.