1. What are the differences in how depreciation is treated by government and by companies in the private sector?

2. A city government purchases a new garbage truck for $120,000 this year. It is estimated that the truck will have a residual value of $20,000 and a useful economic life of 20 years. What would be the depreciation expense each year if the straight-line method were used.

3. Why do organizations, government included, not capitalize all assets that last for more than one budgeting period, despite knowing that doing so would increase the accuracy of the accounting of assets and operations?

4. City Hospital paid $500,000 for a piece of advanced diagnostic equipment. The total transportation and installation cost to make the equipment operational is $50,000. The staff-training cost to operate the new equipment is about $10,000. What should be the value of this capital asset?