Exam 5: Accounting for General Capital Assets and Capital Projects

Which of the following would be considered a general capital asset?

In late June,the Buildit Construction Co.submitted a $600,000 progress billing on a construction contract.On July 2,the bill was approved for payment,subject to a five percent retention,as provided by the contract.Construction expenditures should be debited when

The following are the city of Beaver Creek's capital assets: What aggregate amount should Beaver Creek record in the governmental activities journal?

In 2014,Canon City signed a contract in the amount of $6,000,000 for the construction of a new city hall.Expenditures were $4,000,000 in 2014 and $2,050,000 in 2015,which included a change to the original construction design in the amount of $50,000.What amount should be added to net capital assets in the governmental activities accounts in 2015?

If general capital assets are donated,revenue related to the donation is recognized in the governmental fund statement of revenue,expenditures and changes in fund balance.

During the year,a wealthy local merchant donated a building to the city of Pasedena.The original cost of the building was $300,000.Accumulated depreciation at the date of the gift amounted to $250,000.The appraised fair market value of the donation at the date of the gift was $600,000,of which $40,000 was the value of the land on which the building was situated.At what amount should Rosewood record this donated property in the General Fund?

Premiums received on tax-supported bonds are generally transferred to what fund?

Governments may choose the modified approach,whereby they are not required to record depreciation on general capital assets.

In addition to required disclosures about general capital assets,a government is required to allocate the depreciation expense on all of its general capital assets to functional categories.

Water rights purchased by a city would be considered a capital asset.

If bonds sold to finance a project for the construction of general capital assets are sold at a premium,what legal question arises concerning the premium? Discuss the accounting treatment appropriate to two of the common answers to the legal question.

How should a capital lease for a general capital asset be recorded in the General Fund accounts at the inception of the lease?

GASB standards require that

A government must capitalize the cost of improvements such as roads and bridges,because the GASB requires the cost of such assets to be displayed in the basic financial statements.

To defray engineering and other preliminary expenses incurred prior to the issuance of a long-term bond issue,a capital projects fund borrowed the sum of $50,000 on a short-term basis from National Bank.This transaction should be recorded in

Equipment in general governmental service that had been acquired several years ago by a special revenue fund at a cost of $40,000 was sold for $15,000 cash.Accumulated depreciation of $30,000 existed at the time of the sale.The journal entry to be made in the governmental activities journal will include all of the following except

Capital projects funds generally do not use the Encumbrances Control account.

When a police vehicle purchased by a government is received,it should be recorded in the governmental activities general journal as a(an)

Under a service concession arrangement,a government transfers the rights and obligations of an asset to another legally separate governmental or private sector entity.

After all liabilities are paid and the operating statement accounts closed,it is common to transfer any remaining assets of a capital projects fund to the General Fund.