A government\'s assets include inventory of $2 million, roads constructed for $2
ID: 2568437 • Letter: A
Question
A government's assets include inventory of $2 million, roads constructed for $25 million with accumulated depreciation of $10 million, and equipment acquired for $5 million with accumulated depreciation of $1 million. Its liabilities include an outstanding balance of $5 million for bonds payable issued to construct the roads and a $1 million short-term loan for inventory purchases. What amount should be reported as the net investment in capital assets in the government-wide statement of net position?
$26 million
$10 million
$25 million
$14 million
Explanation / Answer
Answer : $14 millions
Road constructed $25 millions
less: accummulated depreciation ($10 millions) $15 millions
Equipment $5 millions
less: accummulated depreciation ($1 million) $4 millions
less : outstanding balance of bonds ($5 millions)
Net investment in capital assets $14 millions.