Question

16. A government constructed a bridge 20 years ago at a cost of $30 million. The replacement cost of the bridge today would be $90 million. The bridge has a useful life of 60 years. In its government- wide statements the government should record the bridge at a value, net of accumulated depreciation, of: a. $20 million b. $60 million c. $90 million d. $0

Answer 1

Answer:

$20 million

Explanation:

The net of accumulated depreciation is the cost of the road minus accumulated depreciation till date.

Accumulated depreciation=yearly depreciation* 20 years

yearly depreciation=cost/useful life

cost is $30 million

useful life is 60 years

yearly depreciation=$30 million/60 years=$500,000 per yer

accumulated depreciation=$500,000*20=$10 millon

net of accumulated depreciation=$30 million-$10 million

net of accumulated depreciation=$20 million

As a result,option A is the correct answer