A not-for-profit organization receives $150 from a donor. The donor receives two tickets to a theater show and an acknowledgment in the theater program. The tickets have a fair market value of $100. What amount is recorded as contribution revenue?
a.$50
b.$100
c.$150
d.$0
Answer:A
Choice "A" is correct. Contributions to a non-profit include transactions which are unconditional (not requiring a future event to occur), non-reciprocal, voluntary, and not of an ownership investment. The FMV of the theater tickets (the exchange part of the transaction) would not be considered in determining the amount of the contribution revenue. The $50 above the FMV of the tickets is contribution revenue.
Choice "d" is incorrect. Contributions to a non-profit include transactions which are unconditional (not requiring a future event to occur), non-reciprocal, voluntary, and not of an ownership investment. Part of the $150 from the donor can be considered contribution revenue meeting these criteria.
Choice "b" is incorrect. Contributions to a non-profit include transactions which are unconditional (not requiring a future event to occur), non-reciprocal, voluntary, and not of an ownership investment. The $100 from the donor is an exchange transaction, as the donor received theater tickets with a FMV of $100.
Choice "c" is incorrect. Contributions to a non-profit include transactions which are unconditional (not requiring a future event to occur), non-reciprocal, voluntary, and not of an ownership investment. The $150 from the donor includes both an exchange transaction and contribution revenue.