A citizen of Minersville purchased a truck in 20X1 for $120,000.On September 18,20X6,she donated the truck to Minersville.The fair value of the truck on the date of donation was $70,000.How should Minersville report the truck in its government-wide Statement of Net Assets?

Question

Quizplus · Accepted Answer

According to the donation, the fair value of the truck should be recognized as revenue and an asset in the Statement of Net Assets. Therefore, choice C is the correct answer as it increases the value of machinery and equipment by $70,000, which represents the fair value of the donated truck. Option A is incorrect because the fact that no expenditure was made on the truck does not mean that it does not represent an asset of the government. Alternatives B and D are incorrect because the fair value of the donated truck was $70,000, not $50,000 or $120,000.

A Citizen of Minersville Purchased a Truck in 20X1 for $120,000.On