The City of Wilson receives a large sculpture valued at $240,000 as a gift to be placed in front of the municipal building. Assume that the city reports the work as a capital asset. Which of the following is true? Choose the correcta. 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.

The City of Wilson receives a large sculpture valued at $240,000 as a gift to be placed in front of the municipal building. Assume that the city reports the work as a capital asset. Which of the following is true? Choose the correcta. 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.

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter13: Property Transactions: Determination Of Gain Or Loss, Basis Considerations, And Nonta Xable Exchanges

Section: Chapter Questions

Problem 85P

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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 government-wide financial statements?a. A capital asset of $240,000 must be reported.b. No capital asset will be reported.c. If conditions are met, recording the sculpture as a capital asset is optional.d. The sculpture will be recorded but only for the amount paid by the city.
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 statements is true about reporting a revenue in connection with this gift? Choose the correct.a. A revenue will be reported.b. Revenue is reported but only if the asset is reported.c. If the asset is not capitalized, no revenue should be recognized.d. As a gift, no revenue would ever be reported.
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