Question

The following general capital assets were owned by the Town of Otterville: Town buildings $ 3,250,000 Intangible assets 1,000,000 Streets, sidewalks, and water lines 2,000,000 What amount should be recorded as capital assets in the town's governmental activities accounts?

Answer 1

Answer:

The amount of  $5,250,000 should be recorded as capital assets in the town's governmental activities accounts

Explanation:

Capital Assets: The capital assets are that asset that is not made for a sale. It records only tangible assets like- cars, bonds, investment properties, etc,

The computation of the capital assets which is recorded in the town's governmental activities accounts is shown below:

= Town buildings +  Streets, sidewalks, and water lines 2,000,000

= $3,250,000 +  $2,000,000

= $5,250,000

So, the intangible assets is not a capital asset. Therefore, we do not consider in the computation part.