Question

During the year an enterprise fund purchased $230,000 worth of equipment. The equipment was acquired with a cash down payment of $30,000 and a $200,000 loan. A partial year of depreciation on the equipment was taken in the amount of $23,000. What is the net effect of this transaction on the net position accounts of the enterprise fund?

Answer 1

Answer:

The net investment in capital assets is increased by $7,000.

Explanation:

Details                                         amount            amount

equipment                                  $230,000                                      

Partial year-depreciation           ($23,000)            

Net value of the equipment                                $207,000

acquired load                                                      ($200,000)  

increase in capital assets                                    $7,000

Therefore, The net effect of this transaction on the net position accounts of the enterprise fund is, The net investment in capital assets is increased by $7,000.