Question

Question 4:

4. The city of Grace reported $12,000,000 of general capital assets and accumulated depreciation on these assets of $4,000,000 on its December 31, 2019 government-wide statement of net position. The city reported capital outlay expenditures of $1.200.000 in its governmental funds during its fiscal year ending December 31,2020. Also, depreciation associated with general capital assets for the fiscal year ending December 31, 2020 was $800.000 Prepare the three journal entries needed for the December 31, 2020 worksheet that converts the govemmental fund capital asset information to information needed for the government-wide financial statements

Answer 1

Following are the journal entries. Please note Net Assets has been used for balancing accounts.

1) General Capital Assets    Dr      $12000000

    Accumulated Depreciation    Cr $4000000

    Net Assets                          Cr $8000000

(Opening Entries)

2) Depreciation                    Dr      $800000

   Accumulated Depreciation Cr      $800000

(Entry for depreciation for the fiscal year)

3) Changes in Net Assets     Dr     $1200000

    Capital Outlay Expenditure Cr    $1200000

(Entry for Capital Outlay Expenditure)