Question

Matt Shaw buys 100 shares of common stock for $8,000 in January. The value of the stock fluctuates in a narrow range (averaging $8,700) throughout the year. In November, when it has a value of $9,500, he donates it to a non-profit entity. On December 31, the stock has a fair value of $8,200. At what amount should the non-profit entity value the stock on its December 31 statement of financial position?
a. $8,200
b. $8,000
c. $9,500
d. $8,700

Answer 1

Answer:

a. $8,200

Explanation:

The same accounting principles would be applied to non-profit entities while recording their assets as applied to other entities.

Non-profit entity would record its assets at fair value same as assets are recorded by other entities.