Problem

Theresa Johnson does volunteer work for a local not-for-profit entity as a community ser...

Theresa Johnson does volunteer work for a local not-for-profit entity as a community service. She replaces without charge an administrator who would have otherwise been paid $31,000. Which of the following statements is true?

a. The charity should recognize a restricted gain of $31,000.

b. The charity should recognize a contribution of $31,000 as an increase in unrestricted net assets as well as salary expense of $31,000.

c. The charity should recognize a reduction in expenses of $31,000.

d. The charity should make no entry.

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