8. The Art Institute of Chicago received a contribution of art from a wealthy citizen of Chicago in 2021. The museum has a policy of not reporting works of art on its financial statements. This accounting policy is acceptable if the works of art are added to the museum's collections, and A. They are held for public exhibition. B. They are cared for and preserved. C. If sold, the proceeds are restricted for the purchase of art. D. A and B. E. A, B, and C.
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- True or False? In order donated a sculpture to the Nasher art museum in Durham, North Carolina. The Nasher art museum is recognized as a “qualified organization” for U.S. tax purposes, and is not considered a private nonoperating foundation. The sculpture, which David purchased in 2009, had a fair market value of $65,000 when donated, and David’s adjusted basis in the sculpture at the time of his donation was $20,000. If the Nasher art museum retains and displays the sculpture, David’s charitable contribution deduction related to the donation of the sculpture is $45,000 (subject to percentage limitations based on David’s AGI).On January 1, 2020, a rich citizen of the Town of Ristoni donates a painting valued at $370,000 to be displayed to the public in a government building. Although this painting meets the three criteria to qualify as an artwork, town officials choose to record it as an asset. The gift has no eligibility requirements. These officials judge the painting to be inexhaustible so that depreciation will not be reported. o. For the year ended December 31,2020 , what does the town report on its government-wide financial statements in connection with this gift? b. How does the answer to requirement (a) change if the government decides to depreciate this asset over a 10-year period using straight-line depreciation? c. How does the answer to requirement (a) change if the government decides not to capitalize the asset? Complete this question by entering your answers in the tabs below. Required A For the year ended December 31,2020, what does the town report on its government-wide financial statements…On January 1, 2020, a rich citizen of the Town of Ristoni donates a painting valued at $300,000 to be displayed to the public in a government building. Although this painting meets the three criteria to qualify as an artwork, town officials choose to record it as an asset. The gift has no eligibility requirements. These officials judge the painting to be inexhaustible so that depreciation will not be reported. For the year ended December 31, 2020, what does the town report on its government-wide financial statements in connection with this gift? How does the answer to (a) change if the government decides to depreciate this asset over a 10-year period using straight-line depreciation? How does the answer to (a) change if the government decides not to capitalize the asset?
- On January 1, 2017, a rich citizen of the Town of Ristoni donates a painting valued at $300,000 to be displayed to the public in a government building. Although this painting meets the three criteria to qualify as an artwork, town officials choose to record it as an asset. There are no eligibility requirements for the gift. The asset is judged to be inexhaustible so that depreciation will not be reported.a. For the year ended December 31, 2017, what will be reported on government-wide financial statements in connection with this gift?b. How does the answer to requirement (a) change if the government decides to depreciate this asset over a 10-year period using straight-line depreciation?c. How does the answer to requirement (a) change if the government decides not to capitalize the asset?On January 1, 2017, a rich citizen of the Town of Ristoni donates a painting valued at $300,000 to be displayed to the public in a government building. Although this painting meets the three criteria to qualify as an artwork, town officials choose to record it as an asset. There are no eligibility requirements for the gift. The asset is judged to be inexhaustible so that depreciation will not be reported. For the year ended December 31, 2017, what will be reported on government-wide financial statements in connection with this gift? How does the answer to requirement (a) change if the government decides to depreciate this asset over a 10-year period using straight-line depreciation? How does the answer to requirement (a) change if the government decides not to capitalize the asset?A local citizen gives the City of Salem a painting by Picasso to display in city hall. Assume that the city does not choose to report the painting on the government-wide financial statements as a capital asset. Must the city report a revenue for the gift?
- On January 1, 2017, the City of Graf pays $60,000 for a work of art to display in the local library. The city will take appropriate measures to protect and preserve the piece. However, if the work is ever sold, the money received will go into unrestricted funds. The work is viewed as inexhaustible, but the city has opted to depreciate this cost over 20 years (using the straight-line method). How is this work to be reported on the government-wide financial statements for the year ended December 31, 2017? How is this work to be reported in the fund financial statements for the year ended December 31, 2017?On January 1, 2017, the City of Graf pays $60,000 for a work of art to display in the local library. The city will take appropriate measures to protect and preserve the piece. However, if the work is ever sold, the money received will go into unrestricted funds. The work is viewed as inexhaustible, but the city has opted to depreciate this cost over 20 years (using the straight-line method).a. How is this work to be reported on the government-wide financial statements for the year ended December 31, 2017?b. How is this work to be reported in the fund financial statements for the year ended December 31, 2017?A private not-for-profit entity receives two gifts. One is $80,000 and is restricted for paying salaries of teachers who help children learn to read. The other is $110,000, which is restricted for purchasing playground equipment. Both amounts are properly spent by the end of this year. Because the purchase of the playground equipment was made at the end of the year, the organization records no depreciation this period. It has elected to view the equipment as having a time restriction. On the statement of activities, what is reported for unrestricted net assets? An increase of $80,000 and a decrease of $80,000. An increase of $190,000 and a decrease of $190,000. An increase of $190,000 and a decrease of $80,000. An increase of $80,000 and no decrease.
- A private not-for-profit entity receives two gifts. One is $80,000 and is restricted for paying salaries of teachers who help children learn to read. The other is $110,000, which is restricted for purchasing playground equipment. Both amounts are properly spent by the end of this year. Because the purchase of the playground equipment was made at the end of the year, the organization records no depreciation this period. It has elected to view the equipment as having a time restriction. On the statement of activities, what is reported for unrestricted net assets?a. An increase of $80,000 and a decrease of $80,000.b. An increase of $190,000 and a decrease of $190,000.c. An increase of $190,000 and a decrease of $80,000.d. An increase of $80,000 and no decreaseAlpha Hospital, a nongovernmental not-for-profit organization, has adopted an accounting policy that does not imply a time restriction on gifts of long-lived assets. For items (1) through (6), indicate the manner in which the transaction affects Alpha’s financial statements.a. Increase in unrestricted revenues, gains, and other support.b. Decrease in an expense.c. Increase in temporarily restricted net assets.d. Increase in permanently restricted net assets.e. No required reportable event.1. Alpha’s board designates $1,000,000 to purchase investments whose income will be used for capital improvements.2. Income from investments in item (1) above, which was not previously accrued, is received.3. A benefactor provided funds for building expansion.4. The funds in item (3) above are used to purchase a building in the fiscal period following the period the funds were received.5. An accounting firm prepared Alpha’s annual financial statements without charge to Alpha.6. Alpha received…-Calvin’s AGI is $110,000, but the State Museum told Calvin that it plans to sell the painting. What is the Charitable contribution deduction?