On January 2, 2017, the City of Tampa accepted a gift of $2,000,000. The $2,000,
ID: 2508463 • Letter: O
Question
On January 2, 2017, the City of Tampa accepted a gift of $2,000,000. The $2,000,000 and any
earnings are to be distributed as scholarships to Tampa High students. The following occurred
during 2017:
? Received the $2,000,000
? On May 1 acquired $1,000,000, 6%, XYZ Company bonds at par plus accrued
interest. Interest is paid each June 30 and December 31
? Received June 30 interest
? Sold bonds for $1,018,000 PLUS accrued interest on August 1
? Distributed scholarships of $200,000
? Purchased ABC stock for $900,000
? Fair Value of stock, at year-end, was $943,000
What amount was TOTAL “Additions” for 2017?
A. $2,058,000 B. $2,033,000 C. $2,091,000 D. $2,076,000
Explanation / Answer
Computation of addition in Year 2017 Gift Received $2,000,000 a. Interest Received on Bond for May & June $10,000 b. Interest Recived for July Month $5,000 c. Profit on Sale of Bond (1018000-1000000) $18,000 d. Increase in Fair Value of Stock $43,000 Total Addition in 2017 $2,076,000
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