Question 5 Tangible Capital Asset Register

Assistance in coming up with the answers to this questions can be found on UR Courses under RM of Buckland implementation summary on the last two pages.

Please evaluate the following transactions for the Town of New Sampleford and answer the required questions below.

1. In 2008, the town made great strides towards providing their citizens with increased fire protection in the community. After years of planning, the new fire hall was built on the corner of Main Street and 2^nd avenue for $1,400,192. The building itself has a design life of 40 years and the builders anticipate little value remaining in the building after the 40 years are done.
2. The town decided to replace their maintenance shops 1986 Case mower in 2008 with a 1999 John Deer Mower for $15,071. They town council would like to get 5 years worth of use of the new mower before they are forced to purchase another one. The trade in value received on the 1986 Case was $500 and the dealership indicated that the John Deer may have about $1,000 value remaining once the town disposes of it.
3. After years of pressure by residents, town council approved the re-surfacing of Donald Street from 1^st avenue to 7^th avenue, for $756,892 in 2009. Much like the old surface removed, the new surface will have very little value remaining after its 20 year design life is over. The towns consulting engineers have recommended that the road be broken down into six segments when recorded in the asset register for future asset management abilities.
4. Town council decided in 2010 to purchase a gravel truck due to all the construction and maintenance activities in the town. The towns local dealership sold the town a 2008 Volvo gravel truck for $34,921 that was in great condition and had very little kilometers. The towns mechanic indicated to the administrator that they should get at least 10 years out of the truck and should see a remaining value at the end of the trucks life equal to 50% of what they paid for the John Deer mower in 2008.
5. The town has been experiencing rapid growth the last few years due to the proximity to the City of Springsteenville. Since 2007, they have been working on some significant upgrades to their utility system to handle the increased demand caused by the growth in the community. Up until July 31, 2010, which is the current date, the community has invested $675,000 into a new lift station that should be finished and in service midway through 2011. Once in service in 2011, the lift station is anticipated to have little to no remaining value at the end of its useful life.

Required

1. For the above transactions, please identify the following:
   1. Historical cost
   2. Asset description
   3. Location
   4. In service year
   5. Useful life
   6. Residual Value

Helpful hint: Could be useful to provide the answers in a chart below:

Transaction

Historical Cost

Asset Description

Location

In Service Year

Useful Life

Residual Value