Question

The Maryville Cultural Center recently conducted a successful talent show in which local talent performed for a nominal prize. The talent show is an ongoing major event and is central to the center's mission. The event raised 6,500 in gross revenue. Expenses related to the event included2,700 to rent an auditorium, 2,900 to advertise the event,2,200 for trophies and other awards for the winner and the runners up, and 1,800 for printing and mailing tickets. The center believes there was no monetary value received by donors (attendees). To report this event in its statement of activities, the center will report:

1) Special event revenue of 6,500 and special event expense of 4,900.
2) Special event revenue of 6,500 and fund-raising expense of 4,700.
3) Special event revenue of 7,400 and fund-raising expense of 4,700.
4) Special event revenue of 6,500, special event expense of 4,900 and fund-raising expense of 4,700.

Answer 1

The Maryville Cultural Center should report special event revenue of $6,500 and fund-raising expense of $4,700 in its statement of activities.

Step-by-step explanation:

The correct answer is option 2) Special event revenue of 6,500 and fund-raising expense of 4,700.

In this case, the talent show conducted by the Maryville Cultural Center is a special event that is central to the center's mission. The revenue generated from the event, which is $6,500, should be reported as special event revenue. The expenses related to the event, such as renting the auditorium, advertising, and awards, should be reported as fund-raising expenses.

Therefore, the correct way to report this event in the center's statement of activities is to report special event revenue of $6,500 and fund-raising expense of $4,700.