At the beginning of Year 1, the organization received $50,000 in cash as a gift with the

Question:

At the beginning of Year 1, the organization received $50,000 in cash as a gift with the stipulation that the money be used to buy a bus for its use. It made the appropriate entry at that time. On the first day of Year 2, the organization spent the $50,000 for the bus, an asset that will last for 10 years and will have no . Because the money came from an outside donor, the organization decided that a time restriction on the bus should be assumed for 10 years. In Year 2, it reported $5,000as depreciation expense in unrestricted net assets. In addition, the organization made a $50,000 reduction in permanently restricted net assets and a $50,000 increase in unrestricted net assets.
(a) What was the correct amount of unrestricted net assets at the end of Year 2?
(b) What was the correct amount of expenses for Year 2?
(c) What was the correct amount of temporarily restricted net assets at the end of Year 2?

Salvage Value
Salvage value is the estimated book value of an asset after depreciation is complete, based on what a company expects to receive in exchange for the asset at the end of its useful life. As such, an asset’s estimated salvage value is an important...