ACCOUNTING FOR NOT-FOR-PROFITS(TOTAL: 10 MARKS)

1. Abby Hatcher runs Fuzzly Catcher a registered tier 4 charity (i.e. the operating payments are less than $125,000) that cares for abandoned pets. She is the sole volunteer, and currently the only material donor. Explain whether you think the benefits of providing a statement of service performance outweighs the costs. (5 marks)

2. Abby Hatcher's occupation is an artist, and her pieces of work usually sell for $500. To raise funds for Fuzzly Catcher she has donated 10 pieces of work which were successfully auctioned off with an average sales price of $560 cash during the current year. Record the appropriate journal entries for the donation and the sale of the art. (5 marks)