Question

In 2014, canon city signed a contract in the amount of $6,000,000 for the construction of a new city hall. expenditures were $4,000,000 in 2014 and $2,050,000 in 2015, which included a change to the original construction design in the amount of $50,000. what amount should be added to net capital assets in the governmental activities accounts in 2015?

Answer 1

The $6,050,000 amount should be added to net capital assets in the governmental activities accounts in 2015 based on the information from the question above. The government should record every cost made until the building is ready in the net asset capital account. This record is made to show the relevant historical cost of the building.