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36. Stacy Watson, a certified public accountant, donated a significant amount of her spare time to Beth's Gallery, a nonprofit museum. She donated 50 hours

36. Stacy Watson, a certified public accountant, donated a significant amount of her spare time to Beth's Gallery, a nonprofit museum. She donated 50 hours to audit the books and 80 hours selling products at the museum store. She charges her regular clients $200 an hour as a CPA. How should the Gallery report Ms. Watson's donation of time? 37. A. Report $26,000 (130 hours @ $200) as contribution revenue and expense. B. Report $0 as contribution revenue and expense, and describe Ms. Watson's services to the museum in a note to the financial statements. C. Report $10,000 (50 hours @ $200) as contribution revenue and expense. D. Report $10,000 (50 hours @ $200) plus the fair value of the selling services provided by Ms. Watson as contribution revenue and expense. A substantial portion of our study of nonprofits has focused on reporting contributions with donor-imposed restrictions on net assets. However, nonprofits also engage in "exchange transactions." Which of the following is the best description of an exchange transaction? A. A substantial payment made so that two seats in a newly constructed theatre would bear the donor's (patron's) name. B. College tuition paid by the local Better Business Bureau for a qualifying student. C. College tuition paid by a student's parents who borrowed the money on a home equity loan. D. A state grant to a college to cover operating expenses. 38. Which of the following statements is correct? A. If a donor contributes equity securities to a private university, the donor will receive an income tax deduction equal to the market value of the securities and will not have to pay capital gains tax on the difference between the cost of the securities and their market value on the date of donation. B. A contribution of services to a not for profit entity is referred to as an "in kind" contribution. C. A and B. D. Neither A nor B

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