For each of the following assets acquired by federal departments and agencies, indicate how the government should report the asset. If it is to be reported on the government’s balance sheets, then state whether it should be amortized or depreciated. Justify your response by specifying the category into which the asset would fall.
1. The U.S. Coast Guard purchases, for $3 million, a mainframe computer to be used to enhance nonmilitary navigation systems.
2. The Department of Defense purchases a mainframe computer for $6 million. The computer is specially designed to be used on board a guided-missile cruiser to target missiles.
3. The Department of Agriculture acquires, for $20 million, products that it intends to resell. At year-end, based on latest acquisition costs, the market value of these goods has increased to $21 million.
4. The Department of Interior constructs a monument, at a cost of $7 million, honoring the military personnel who served in the Gulf War.
5. The Department of Interior purchases land in Bethesda, Maryland, for $6 million. It expects to construct an office complex on the land.
6. The Department of the Interior purchases land in East Glacier, Montana, for $130 million. The land will be incorporated into Glacier National Park.
7. NASA incurs $24 million to improve facilities at its Johnson Space Center. The facilities are to be used both as a training center for astronauts and other personnel and as a museum for visitors.?