Reference no: EM132699814
TGF planned to launch an awareness campaign in the neighbourhood and, although it knew its members would volunteer time to assist, it budgeted $10,000 to cover any additional wages for this purpose. During August 20X6, members of TGF donated 1,000 hours of their time and conducted the campaign on a much larger scale than TGF had planned and would have paid for. The volunteer effort was so large that TGF did not have to pay any additional wages to carry out the campaign. The fair market value of the donated services was estimated to be $25,000.
Problem 1: Assume that TGF uses the restricted fund method to account for contributions. It maintains a general fund, an endowment fund, an equipment fund, and a land fund. Which of the following would be included in the journal entries to record the transactions in August 20X6 related to the donation of members' time to TGF?
a) A net credit to deferred contributions for $10,000
b) A net debit to awareness campaign expenses for $10,000
c) A net credit to contribution revenue for $25,000
d) A net debit to awareness campaign expenses for $25,000