A local government recorded the sale of a capital asset at a gain by recording a debit to cash and credit to proceeds of sale of capital asset. What is the worksheet entry when preparing the government-wide statements?

Question

Quizplus · Accepted Answer

When preparing the government-wide statements, the sale of a capital asset should be recorded by debiting Proceeds of sale of capital asset and crediting Capital asset (net) to remove the asset from the statement of Net Position. Additionally, a credit to Gain on sale of capital asset is necessary to properly recognize the gain on the sale. Therefore, choice C is the best option.

A Local Government Recorded the Sale of a Capital Asset