In 2012, StartUp Inc

question 2

Multiple Choice

In 2012, StartUp Inc. (SU) set up a new manufacturing facility in Manitoba. To encourage SU to set up its factory, the province provided equipment with a fair market value of $45,000 and an estimated useful life of 5 years using straight-line depreciation. What journal entry would be required in fiscal 2013, if the net method is used?

• A)No entry is required.
• B)A credit to other comprehensive income - donated assets of $9,000.
• C)A credit to deferred income of $9,000.
• D)A credit to accumulated depreciation for $9,000.

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Definitions:

Spending Variance

The difference between the actual cost incurred for something and the expected cost according to a budget.

Tenant-Days

A metric used in real estate to quantify the number of days a property is rented out.

Revenue Variance

The difference between the actual revenue earned and the budgeted or forecasted revenue.

Client-Visits

The number of times clients go to a business or service provider's location within a specified period.