An Enterprise Fund (EF) issued bonds in the amount of $100,000 and immediately acquired capital assets from the bond proceeds at a cost of $100,000. As of December 31, 2018, accumulated depreciation on the assets was $10,000. Also, as of December 31, 2018, the EF had paid back $15,000 of the debt principal. In its December 31, 2018, statement of net position, how much should the EF report as its net investment in capital assets?

Question

Quizplus · Accepted Answer

Net investment in capital assets is equal to the sum of the carrying values (net of accumulated depreciation) of the EF's capital assets ($100,000 - $10,000), less the related debt, consisting of current and noncurrent revenue bonds payable ($85,000).

An Enterprise Fund (EF) Issued Bonds in the Amount of $100,000