Leaf Private College is sponsored by a religious group. Volunteers from this religious group regularly contribute their skilled services to Leaf and are paid nominal amounts to cover their commuting costs. If Leaf did not receive these volunteer services, it would have to purchase similar services. During 2019, the total amount paid to these volunteers was $10,000. The gross value of services performed by them, as determined by reference to layequivalent salaries, amounted to $400,000. What amount should Leaf record as expenses in 2019 for these volunteers’ services?a. $410,000b. $400,000c. $10,000d. $0
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
Leaf Private College is sponsored by a religious group. Volunteers from this religious group regularly contribute their skilled services to Leaf and are paid nominal amounts to cover their commuting costs. If Leaf did not receive these volunteer services, it would have to purchase similar services. During 2019, the total amount paid to these volunteers was $10,000. The gross value of services performed by them, as determined by reference to layequivalent salaries, amounted to $400,000. What amount should Leaf record as expenses in 2019 for these volunteers’ services?
a. $410,000
b. $400,000
c. $10,000
d. $0
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