The City Of Scarmont Manages 200000 In Securities

Question

The City of Scarmont manages $200,000 in securities given to it in trust by the Citizens for City Beautification (CCB), a not‐for‐profit organization. Each year, the CCB receives proposals for beautif…

The City of Scarmont manages $200,000 in securities given to it
in trust by the Citizens for City Beautification (CCB), a
not‐for‐profit organization. Each year, the CCB receives proposals
for beautification projects from various individuals and groups and
selects two to three projects for funding. The City is responsible
for managing the investment and disbursing the funds in accordance
with the CCB request. The City accounts for the securities in a
separate fund.
During the year, the City received $10,000 in investment earnings
on the securities, $1,000 of which was related to earnings from the
previous year, which were not received 60 days after the fiscal
year end. At the end of the year, the market value of the
securities was $208,000. How much revenue should be recognized in
the fund in conjunction with these activities?

Solutions

Expert Solution

City Can Record Profit of $ 10000 which is earning on the
securities and also record the anticipated profit of $ 8000 as
increse in the value of the securities

Total revenue= $ 18000

Since $1000 which are the earning Related with previous year can
not be record as it's not received in current year and also within
60 days

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