Question
Cailor Computers has an August 31st, year end and is privately held. On July 20th, 2022, Cailor Corporation pledged to donate computers to a local
Cailor Computers has an August 31st, year end and is privately held. On July 20th, 2022, Cailor Corporation pledged to donate computers to a local school district. The balance for the computers on the companys balance sheet is $100,000 which approximates the computers fair value. The pledge stipulated that the donation would be made on September 1, 2022. Cailor made the donation on September 1, 2022. Cailor Computers controller is unsure of when and how to record the donation.
Accounting Issue: When should Cailor recognize the donation to the school district? What are the correct accounts that should be used to record the journal entry? a. Codification Reference:
b. Your answer/interpretation of the guidance for how it applies to Cailor; should they recognize the donation in July 2022 or September 2022? Also, what accounts should be used to record the journal entry?
c. Record the journal entry for the donation. Clearly indicate the date and the account names for the journal entry.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started