During the year,a wealthy local merchant donated a building to the city of Pasedena.The original cost of the building was $300,000.Accumulated depreciation at the date of the gift amounted to $250,000.The appraised fair market value of the donation at the date of the gift was $600,000,of which $40,000 was the value of the land on which the building was situated.At what amount should Rosewood record this donated property in the governmental activities accounts at the government-wide level?

Question

Quizplus · Accepted Answer

The donated property should be recorded at its fair market value, which is $600,000. Though the original cost and accumulated depreciation are also known, they are not relevant in determining the value of the donation. The value of the land is also included in the fair market value, so it is not necessary to allocate a portion of the donation to land and the remaining to the building.

During the Year,a Wealthy Local Merchant Donated a Building to the City