The City of Chessie Received Two Contributions During Its Current

question 18

Essay

The City of Chessie received two contributions during its current fiscal year:
-A developer contributed 10 acres of land as part of an agreement with the city to allow more houses to be built per acre than current zoning laws permit. The city will use the land to build a park. The developer purchased the land for $1.5 million. The fair value of the land at the time of the contribution was $1.9 million.
-A local resident contributed 30 acres of land to the city. The city agreed that it would sell the land and use the proceeds to add a new wing to the city's senior center. The resident paid $500,000 for the land. When it was contributed, it had a fair value of $1.5 million. The city sold the land to several developers a month after its fiscal year-end for $1.7 million.
a. Prepare journal entries to record each of these contributions in the city's general fund.
b. Comment on and justify any differences in the way you recognized each of these transactions.
c. Would your answer on the contribution for the senior center be different if the city had been unable to sell the land before its financial statements were issued?
d. How would each of these transactions be reported in the city's government-wide financial statements?

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Definitions:

Elderly

The elderly refers to older individuals, typically those beyond the age of retirement, who are in the later stages of life, often requiring different forms of social and healthcare support.

Earning Power

The ability or capacity of an individual or company to generate income over a given period of time.

Functionalism

A theoretical perspective in sociology that emphasizes the social functions of institutions and their role in maintaining social stability and cohesion.

Symbolic Interactionist

A symbolic interactionist is a scholar of a sociological perspective focusing on how individuals interact with each other via symbols—words, gestures, attire—in everyday life, emphasizing subjective meanings and social construction of reality.