A Private,not-For-Profit Hospital Received a Donation of Medicine from the XYZ

question 76

Multiple Choice

A private,not-for-profit hospital received a donation of medicine from the XYZ Pharmaceutical Company on March 15,20X9.The cost of the medicine to the company was $66,000,and its market value was $110,000.Twenty percent of the medicine was used by the hospital during the year ended June 30,20X9.On the hospital's statement of operations for the year ended June 30,20X9,the contribution of medicine would increase operating revenues by:

• A)$66,000.
• B)$110,000.
• C)$52,800.
• D)$88,000.

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Definitions:

Incremental Net Operating Income

The difference in net operating income between two alternatives.

Depreciated

Refers to the decrease in the value of an asset over time due to wear and tear or obsolescence.

Sales Revenues

The total amount of money generated from the sale of goods or services before any costs or expenses are deducted.

Cash Operating Expenses

The expenses a company incurs during its day-to-day operational activities, paid in cash, such as rent, utilities, and salary payments.