Question

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 2016 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 2016 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 2016

Answer 1

Answer: $3600

Step-by-step explanation:

From the question, we are informed that Simplex Games, organized to provide athletic competition opportunities for high school students, by using a number of volunteers in carrying out its mission.

We are further told that at the 2016 Games 50 volunteers provided a total of 1,000 hours of service performing tasks and that 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 2016 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.

Based on the information provided above, the contributed service revenue that Simplex Games will recognize in 2016 will be hours of service multiplied by the CPA services cost per hour. This will be:

= $60 × $60

= $3600