if governments don't preserve their infrastructure assets they must depreciate them

Project Description:

in 2011 bantham county incurred $80 million in costs to construct a new highway. engineers estimate that the useful life of the highway is 20 years.
1. prepare the entry that the county should make to record annual depreciation(straight-line method) to facilitate preparation of its government-wide statements.
2. what reservations might you have as to the engineers; estimate of useful life? why might any estimate of a highway's life be suspect?
3. the engineers have determined that in 2012 the couty would have to incur $1 million in resurfacing costs every four years to preserve the highway in teh same condition as it was when the road was completed. in 2012 the county spent $1 million to resurface the highway.
a. pepare the entries, including the one for the first-year depreciation, the county should make.
b. assume instead that as permitted by statement no. 34, the county opts to report a road preservation charge in lieu of deprectiation. prepare the entry the county should make.
4. suppose that in 2012 the county added a new lane to a portion of the highway. the cost was $1.5 million. prepare an appropriate journal entry to facilitate preparation of teh government-wide ssattements regardless of whether the county takes the depreciation or the modified approach.
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Price Type: Negotiable

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