Protect Purple Plants (PPP) uses the deferral method of accounting for contributions and has no separate fund
Question:
Protect Purple Plants (PPP) uses the deferral method of accounting for contributions and has no separate fund for restricted contributions. On January 1, Year 6, PPP received its first restricted cash contribution-$120,000 for the purchase and maintenance of land and a greenhouse building for its rare purple plant collection.
On July 1, Year 6, PPP acquired land and a building for $22,000 and $80,000 cash, respectively. The building has an estimated useful life of 20 years and zero residual value. On December 31,
Year 6, the remaining $18,000 cash was paid to KJ Maintenance Ltd. for a three-year maintenance contract that requires KJ personnel to provide maintenance services four days per month until December 31, Year 9.
Required
Prepare the journal entries for the following dates:
(i) January 1, Year 6
(ii) July 1, Year 6
(iii) December 31, Year 6 including year-end adjusting entries
Step by Step Answer:
Modern Advanced Accounting in Canada
ISBN: 978-1259087554
8th edition
Authors: Hilton Murray, Herauf Darrell