Big Research Foundation Is a Large Non-Profit Organization That Funds

question 24

Essay

Big Research Foundation is a large non-profit organization that funds research into a variety of diseases.Annual revenues are in excess of $10 million.It has an endowment fund,a general fund and a capital fund.You have just been appointed treasurer on its Board and the accountant has come to you with a variety of questions.
Required:
Address each of the following questions,making sure that your advice complies with GAAP.
1.Big received a large endowment of $2 million on January 31,20X9.During the year ended 20X9,there was interest earned of $60,000.
Prepare the journal entries required to record the receipt of the endowment and the interest earned.
2.During the year,1,500 volunteer hours were provided.The accountant has estimated that the value of this time is $37,500.The accountant stated that without the volunteers,Big would have had to hire employees to perform the work.
Determine how the volunteer hours should be reported.
3.A large piece of research equipment was donated to the laboratory.The value of the equipment is $250,000 and it estimated to last about 10 years.
Prepare the journal entries related to this donated equipment for the year.

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Definitions:

Opponent-process Theory

A theory in psychology that explains emotional reactions to stimuli, positing that emotions are followed by opposite emotional states.

Negative Afterimages

Visual illusions that occur after looking at a brightly colored object for a prolonged period and then looking away, resulting in seeing the complementary color.

Tinted Glasses

Eyewear with lenses that are colored or darkened to reduce brightness and protect the eyes from glare.

Trichromatic Theory

A theory of color vision that states the human eye has three types of receptors with differing sensitivities to light wavelengths, corresponding to red, green, and blue colors.