During its calendar year 2019, a city issued $800,000 of bonds to acquire various items of capital equipment. By the end of 2020, the city had spent all the bond proceeds to purchase capital assets. Accumulated depreciation on the assets was $120,000, and $150,000 of the bonds had been paid off. How much should the city report in its government-wide statement of net position as net investment in capital assets?

Question

Quizplus · Accepted Answer

The net investment in capital assets component represents the government's capital assets minus accumulated depreciation and minus outstanding balances of bonds, notes, or other borrowings attributable to acquiring, constructing, or improving those assets. The city's net investment in capital assets is $30,000 (capital assets of $800,000 less accumulated depreciation of $120,000 less outstanding bonds of $650,000).

During Its Calendar Year 2019, a City Issued $800,000 of Bonds