Protect Purple Plants (PPP) uses the deferral method of accounting for contributions and has no separate fund for restricted contributions. On January 1, Year 6, PPP received its first restricted cash contribution-$120,000 for the purchase and maintenance of land and a greenhouse building for its rare purple plant collection. On July 1, Year 6, PPP acquired land and a building for $22.000 and $80,000 cash, respectively. The building has an estimated useful life of 20 years and zero residual value. On December 31, Year 6, the remaining $18,000 cash was paid to KJ Maintenance Ltd. for a three-year maintenance contract that requires KJ personnel to provide maintenance services four days per month until December 31, Year 9.

Protect Purple Plants (PPP) uses the deferral method of accounting for contributions and has no separate fund for restricted contributions. On January 1, Year 6, PPP received its first restricted cash contribution-$120,000 for the purchase and maintenance of land and a greenhouse building for its rare purple plant collection. On July 1, Year 6, PPP acquired land and a building for $22.000 and $80,000 cash, respectively. The building has an estimated useful life of 20 years and zero residual value. On December 31, Year 6, the remaining $18,000 cash was paid to KJ Maintenance Ltd. for a three-year maintenance contract that requires KJ personnel to provide maintenance services four days per month until December 31, Year 9.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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