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Accounting Tutorial › With Restricted Funds

Here we will record the journal entries for SpringTime’s capital assets and related contributions.

As SpringTime’s revenues are below $500,000, it need not record the capital assets in its statements, and may instead provide certain note disclosure (CICA Handbook 4430.03,.40). But SpringTime’s contributors like to see capital assets on the balance sheet, so capital assets are recorded.

During the year, SpringTime was given a desk with a fair value of $200. Amortization expense for the year amounted to $110, of which $60 related to contributed or funded assets.

Contributed capital assets should be recorded at their fair value so long as fair value can be reasonably estimated (4410.19). We therefore make the following entry:

  dr cr
Capital assets 200  
Capital contributions   200

SpringTime has a restricted fund for capital contributions and therefore these amounts are recognized as revenue when received.
The amortization expense for capital assets in 2000 was $110. We need to record the amortization of the assets:

  dr cr
Amortization 110  
Accumulated amortization   110

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