Respuesta :
Answer:
When a company receives a donated asset, the accounting treatment depends on whether it is a for-profit or nonprofit organization. Let’s break it down:
For-Profit Companies:
The company should record the received asset at its fair market value. This value can be determined through an appraisal, market rates for similar assets, or the net present value of expected future cash flows generated by the asset.
The accounting entries are as follows:
Debit the relevant fixed asset account (at fair market value).
Credit the account for contribution revenue.
Nonprofit Organizations:
Similar to for-profit companies, nonprofits should also record the donated asset at its fair market value.
The accounting entries are as follows:
Debit the relevant fixed asset account (at fair market value).
Credit the account for contributions.
In summary:
For-profit: Debit fixed asset, credit contribution revenue.
Nonprofit: Debit fixed asset, credit contributions.
Therefore, the correct answer is increase in assets (specifically fixed assets), which aligns with the accounting principles for both for-profit and nonprofit entities. There is no direct impact on liabilities or revenue due to the donation of the asset.
Explanation:
