During the Year, a Wealthy Local Merchant Donated a Building

question 17

Multiple Choice

During the year, a wealthy local merchant donated a building to the City of Rosewood. The original cost of the building was $300,000. Accumulated depreciation at the date of the gift amounted to $250,000. The appraised fair market value of the donation at the date of the gift was $600,000. At what amount should this contribution be recorded in the governmental activities accounts at the government-wide level?

• A) $50,000.
• B) $300,000.
• C) $600,000.
• D) $0.

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Definitions:

Accounting Method

The rules and procedures that a company follows in reporting its financial transactions, including how it records income and expenses.

Income Statement

A document detailing a firm's earnings, outgoings, and profit within a designated timeframe.

Continuing Operations

Parts of a business expected to continue for the foreseeable future, exclusive of any segments that may be sold off or discontinued.

Audit

A systematic examination of books, accounts, documents, and vouchers of an organization to ascertain how far the financial statements present a true and fair view of the concern.