The City of Bluefield had general obligation debt outstanding in the amount of $64,000,000 and had available resources of $12,000,000 to pay that debt. The assessed valuation of property in the city is $800,000,000. The state applies a 10 percent debt limit, based on assessed valuation. The debt margin to be reported in the City's statistical section of the CAFR would be:

Question

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To calculate the debt margin, we need to first calculate the debt limit based on the assessed valuation of property in the city. The debt limit is 10% of $800,000,000=$80,000,000.

Next, we subtract the outstanding debt from the debt limit to get the debt margin:

$80,000,000 - $64,000,000 = $16,000,000

Since the available resources to pay debt are $12,000,000, we subtract that from the debt margin:

$16,000,000 - $12,000,000 = $4,000,000

Therefore, the debt margin to be reported in the City's statistical section of the CAFR would be $28,000,000 (option D).

The City of Bluefield Had General Obligation Debt Outstanding in the Amount