Question

Riviera Township reported the following data for its governmental activities for the year ended June 30, 20X9: Item Amount Cash and cash equivalents $1,000,000 Receivables 300,000 Capital assets 8,500,000 Accumulated depreciation 1,200,000 Accounts payable 400,000 Long-term liabilities 4,000,000 Additional information available is as follows: All of the long-term debt was used to acquire capital assets. Cash of $475,000 is restricted for debt service. 1) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for total net assets?A) $2,425,000B) $4,200,000C) $2,900,000D) $3,625,0002) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets invested in capital assets, net of related debt?A) $4,200,000B) $2,900,000C) $2,825,000D) $3,300,0003) Based on the preceding information, on the statement of net assets prepared at June 30, 20X9, what amount should be reported for net assets, unrestricted?A) $425,000B) $900,000C) $525,000D) $825,000

Answer 1

1. B) $4,200,000

2. D) $3,300,000

3. B) $900,000

Step-by-step explanation:

1. Total net assets = Total assets - Total Liabilities

=(1,000,000+300,000+8,500,000) - (1,200,000 + 400,000 + 4,000,000)

=9,800,000 - 5,600,000

=$4,200,000

2. The amount that should be reported for net assets invested in capital assets, net of related debt is

=(Capital assets- Accumulated Dep) - Long term debt

=(8,500,000 - 1,200,000) - 4,000,000

=7,300,000 - 4,000,000

=$3,300,000

3. The amount that should be reported for net assets, unrestricted is

=Total Net assets - Net of related debt

=4,200,000 - 3,300,000

=$900,000