FREE Trial

Assume in Problem 17 that the city reports the work as a capital asset. Which of the

Question:

Assume in Problem 17 that the city reports the work as a capital asset. Which of the following is true?
a. Depreciation is not recorded because the city has no cost.
b. Depreciation is not required if the asset is viewed as being inexhaustible.
c. Depreciation must be recognized because the asset is capitalized.
d. Because the property was received as a gift, recognition of depreciation is optional.


Data from Problem 17

The City of Wilson receives a large sculpture valued at $240,000 as a gift to be placed in front of the municipal building. Which of the following is true for reporting the gift within the governmentwide financial statements?

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Answer rating: 60% (5 reviews)

The city receives a large sculpture valued at 240000 as a gift to be placed in front of the municipal building Governments should capitalize workings ...View the full answer


answer-question
Answered By
tutor-profile-image
Zeeshan Ahmad
I have passed BSCS from University of Sargodha. I had taught math in different institutes for two years.
0.00 0 Reviews 10+ Question Solved
Related Book For  answer-question
Fundamentals Of Advanced Accounting

Fundamentals Of Advanced Accounting

ISBN: 9781260575927

8th Edition

Authors: Joe Ben Hoyle

See More Books
Question Posted:
See More Questions

Related Video

Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.

Students also viewed these Business questions

Solid Phase Microextraction Recent Developments And Applications 1st Edition - ISBN: 3662535963 - Free Book