A Local Social Worker, Earning $12 Per Hour Working for the State

question 9

Essay

A local social worker, earning $12 per hour working for the state government, contributed 600 hours of time at no charge to the Sunny Homeless Shelter, a voluntary health and welfare entity.If not for these donated services, an additional staff person would have been hired by the entity.
Required:
How should the Sunny Homeless Shelter record the contributed services?

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Definitions:

Average Total Assets

A measure used to evaluate a company's efficiency and profitability, calculated by averaging the total assets at the beginning and end of an accounting period.

Stockholders' Equity

The portion of a company's assets that belongs to shareholders after deducting liabilities, representing ownership interest.

Common Stock

A type of security that signifies ownership in a corporation and represents a claim on part of the company's profits or losses.

Retained Earnings

The segment of net profit held back by the business rather than being shared with its proprietors in the form of dividends.