_____ Volunteers constructed an addition to an existing building owned by a nonprofit organization. The cost of materials was $60,000 (donated by local firms). The value of the labor hours (based on prevailing hourly rates for carpenters and electricians) was $40,000. An outside contractor offered to do the work for $115,000. At the completion of the job, the county property tax assessor assigned a value of $120,000 to the addition. Under FAS 116, how much should be reported in the financial statements for donated services?
A) $100,000
B) $115,000
C) $120,000
D) $100,000 or $120,000 at the option of the nonprofit organization.
E) $115,000 or $120,000 at the option of the nonprofit organization.

Question

_____	Volunteers constructed an addition to an existing building owned by a nonprofit organization. The cost of materials was $60,000 (donated by local firms). The value of the labor hours (based on prevailing hourly rates for carpenters and electricians) was $40,000. An outside contractor offered to do the work for $115,000. At the completion of the job, the county property tax assessor assigned a value of $120,000 to the addition. Under FAS 116, how much should be reported in the financial statements for donated services?
A) $100,000
B) $115,000
C) $120,000
D) $100,000 or $120,000 at the option of the nonprofit organization.
E) $115,000 or $120,000 at the option of the nonprofit organization.

Quizplus · Accepted Answer

The value of donated services is the fair value of the services received. In this case, the fair value is the lower of the outside contractor's bid ($115,000) or the value assigned by the county property tax assessor ($120,000). Therefore, the nonprofit organization should report $120,000 in the financial statements for donated services.

_____ Volunteers Constructed an Addition to an Existing Building Owned by a Nonprofit