Simplex 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 2014 Games 50 volunteers provided a total of 1,000 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 2014 the CPA firm provided 50 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 2014?

Question

Quizplus · Accepted Answer

Simplex Games should only recognize contributed service revenue for the volunteer workers as they provided services directly related to the mission of the organization. The total value of the volunteer services provided by 50 volunteers for 1,000 hours at $6 per hour is $6,000. Since the CPA firm's services are not directly related to the mission of the organization, they are not eligible for contributed services revenue recognition. Therefore, the answer is $6,000.

Simplex Games,a Not-For-Profit Entity Organized to Provide Athletic Competition Opportunities