Question

. Unique Games, a not-for-profit entity organized to provide athletic competition opportunities for high school students, utilizes a number of volunteers in carrying out its mission. At the 2018 Games 50 volunteers provided a total of 1000 hours of service performing tasks such as picking up litter and delivering water to the athletes. A local CPA firm donates its services to prepare the annual tax return and other federal and state required paperwork which must be filed to maintain its status as a tax-exempt organization. During 2018 the CPA firm provided 60 hours of service. If purchased, the CPA services would have cost $60 per hour and the game workers would have cost $6 per hour. How much contributed service revenue should Simplex Games recognize in 2018? A. $6,000. B. $3,600. C. $3,000. D. $0

Answer 1

The answer is $0.

Step-by-step explanation:

Contributed service revenue or contributed revenue can be defined as the service or goods received with no payment or any other kind of exchange.

So in this question, the work from the volunteers and the film from CPA can be all accounted for contributed service revenue.

If we calculate them;

• The movie costs $60 per hour so at 60 hours, it would cost $3600.
• The 50 volunteers worked a total of 1000 hours, at $6 per hour, the total cost is $6000.

But since Unique Games are a non-profit entity, the amount they should recognize as contributed service revenue is $0.

I hope this answer helps.