The City of Kamen maintains a collection of paintings of a former citizen in its
ID: 2481938 • Letter: T
Question
The City of Kamen maintains a collection of paintings of a former citizen in its City Hall building. During the year, one painting was purchased by the city for $2,000 at an auction using appropriated funds in the General Fund. Also during the year, a donation of a painting valued at $3,000 was made to the city.
Required:
A. Prepare the journal entry/entries for the two transactions for the purposes of preparing the fund financial statements.
B. Prepare the journal entry/entries for the two transactions for the purposes of preparing the government-wide financial statements.
Explanation / Answer
A. Prepare the journal entry/entries for the two transactions for the purposes of preparing the fund financial statements
1Dr. Expenditures Paining 2,000
Cr. Cash 2,000
2 No entry
B. Prepare the journal entry/entries for the two transactions for the purposes of preparing the government-wide financial statements.
Dr. Paintings $5,000
Cr. Cash $2,000
Cr. Revenue - Donations $3,000