Assume in Problem 17 that the city reports the work as a capital asset. Which of the following is true?
a. 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.
Data from Problem 17
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 governmentwide financial statements?
