During the year,a wealthy local merchant donated a building to the city of Rosewood.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

According to the Governmental Accounting Standards Board, donated capital assets are to be recorded at their fair market value on the date of donation. In this case, the fair market value of the donated property is $600,000, so that is the amount at which Rosewood should record the property in the governmental activities accounts at the government-wide level. The original cost and accumulated depreciation are not relevant when recording donated capital assets. Therefore, options A, B, and D are incorrect.

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