A government\'s assets include inventory of $2 million, roads constructed for $2

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.

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