St Mary's Extended Care Center, a Not-For-Profit Entity, Enjoys the Services

question 28

Multiple Choice

St. Mary's Extended Care Center, a not-for-profit entity, enjoys the services of a group of high-school-age people who each agree to work three afternoons a week for three hours each afternoon performing a variety of patient-related services, such as writing letters for those who are unable to do so, delivering mail to the patient rooms, and pushing wheel-chair patients across the grounds. The services rendered by these young people enhance the quality of life for the residents. They could not be provided if they were not donated because there are not enough resources to do so. The past year the young people donated 5,000 hours in total. The services would have cost $6.00 per hour if they had been purchased but they were worth $10 an hour to St. Mary's. What is the amount of contributed revenue that should be recognized by St. Mary's related to these services?

• A) $50,000.
• B) $30,000
• C) $0.
• D) Cannot determine.

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Definitions:

Liability

A legal responsibility or obligation, often financial in nature, that an individual or entity is bound to settle.

Implied Bailment

A situation where possession of property is transferred without explicit agreement, with an understanding that the property will be cared for and returned.

Unlocked Locker

A storage unit or compartment that is not secured with a lock, potentially exposing contents to theft or unauthorized access.

Cell Phone

A portable, wireless telephone for making calls over a cellular network, not restricted by physical connection lines.