The City of Warwick Received $4,000,000 from One of Its

question 16

Multiple Choice

The City of Warwick received $4,000,000 from one of its most prominent citizens during the year ended June 30,20X9.The donor stipulated that the $4,000,000 be invested permanently,and that interest and dividends earned on the investments be used to support the homeless people of Warwick.During the year ended June 30,20X9,dividends received from stock investments amounted to $20,000,while interest received from bond investments amounted to $40,000.At June 30,20X9,$10,000 of interest was earned,but it will not be received until July of 20X9.The fair value of the securities in which the $4,000,000 was invested had increased $8,000 by June 30,20X9.
-Refer to the above information.On the statement of fiduciary net assets at June 30,20X9,the nonexpendable trust fund should report investments and interest receivable of:

• A)Option A
• B)Option B
• C)Option C
• D)Option D

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Definitions:

Straight-Line

A method of calculating depreciation of an asset which assumes the asset depreciates equally over its useful life.

Tax Basis

The value of an asset for tax purposes, used to calculate capital gains or losses upon disposition of the asset.

Salvage Value

The estimated value that an asset will realize upon its sale at the end of its useful life.

Reportable Segment

A part of an organization distinguished by its business activities, products, or services, which is significant enough to require separate financial reporting under financial reporting standards.