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 in connection with this gift?
Transcribed Image Text:Required A Required B Required C
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?
Required A Required B
Required C
How does the answer to requirement (a) change if the government decides not to capitalize the asset?
Transcribed Image Text: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.
a. 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
Required B Required C
For the year ended December 31, 2020, what does the town report on its government-wide financial statements in connection
with this gift?
< Required A
Required B >
Definition Video Definition Accounting method wherein the cost of a tangible asset is spread over the asset's useful life. Depreciation usually denotes how much of the asset's value has been used up and is usually considered an operating expense. Depreciation occurs through normal wear and tear, obsolescence, accidents, etc. Video
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