Not-for-profit exchange transactions

  • Creator
    Topic
  • November 3, 2015 at 12:34 am #197940
    NinaSun
    Member

    Oz, a non-governmental not-for-profit organization, received $50,000 from Ame Company to sponsor a play given by Oz at the local theater. Oz gave Ame 25 tickets, which generally cost $100 each. Ame received no other benefits. What amount of ticket sales revenue should Oz record?

    a. $2,500

    b. $47,500

    c. $50,000

    d. $0

    The answer is “a”. The cost of premiums given should be classified as fundraising expense. I think there should be a debit to fundraising expense and credit to inventory. Why there is a sales revenue? How should be the journal entry? Thanks

    AUD-74,75 11/2014
    REG-80 04/2015
    FAR-74, 91 11/2015
    BEC-79 08/2015

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