Fike Hospital,a private,not-for-profit institution,receives an unrestricted gift of common stock with a fair value of $100,000.The donor had paid $40,000 for the stock five years earlier.The gift should be recorded as an

Question

Quizplus · Accepted Answer

The fair value of the stock at the time of the donation is $100,000, which is higher than the donor's cost basis of $40,000. Therefore, Fike Hospital should record the gift as an increase in unrestricted net assets of $100,000. Since the gift is unrestricted, there are no limitations or restrictions placed on its use.

Fike Hospital,a Private,not-For-Profit Institution,receives an Unrestricted Gift of Common Stock