A Bridge Construction Project, Accounted for in a Capital Projects $\quad$

question 28

Short Answer

A bridge construction project, accounted for in a Capital Projects Fund, is in Year 2 of an anticipated three year construction period. In Year 1, costs of $300,000 were incurred. In Year 2, $1,530,000 of costs were incurred. What entry would be necessary in the General Capital Assets accounts for Year 2? $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$$\quad$$\begin{array}{lrr}&\quad\text { Debit } &\quad\quad \text { Credit }\end{array}$
A)
$\begin{array}{lcc}\text { Capital Outlay } &\quad\quad\quad\quad\quad \$ 1,530,000 \\\text { Cash }&& \$ 1,530,000 \\\end{array}$

B)
$\begin{array}{lcc}\text { Construction in progress }&\quad \$ 1,530,000 \\\text { Cash }&& \$ 1,530,000 \\\end{array}$

C)
$\begin{array}{lcc}\text { Construction in progress } & \$ 1,530,000\\\text { Net investment in capital assets }& & \$ 1,530,000 \\\end{array}$

D)
$\begin{array}{lcc}\text { Construction in progress } & \$ 1,830,000\\\text { Net investment in capital assets }&& \$ 1,830,000 \\\end{array}$

• A)
• \(\begin{array}{lcc}
• \text { Capital Outlay } &\quad\quad\quad\quad\quad \$ 1,530,000 \\
• \text { Cash }&& \$ 1,530,000 \\
• \end{array}\)
• B)
• \(\begin{array}{lcc}
• \text { Construction in progress }&\quad \$ 1,530,000 \\
• \text { Cash }&& \$ 1,530,000 \\
• \end{array}\)
• C)
• \(\begin{array}{lcc}
• \text { Construction in progress } & \$ 1,530,000\\
• \text { Net investment in capital assets }& & \$ 1,530,000 \\
• \end{array}\)
• D)
• \(\begin{array}{lcc}
• \text { Construction in progress } & \$ 1,830,000\\
• \text { Net investment in capital assets }&& \$ 1,830,000 \\
• \end{array}\)

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Definitions:

Expectancy Theory

A motivational theory suggesting that individual motivation to perform is influenced by the expectation that effort will lead to performance and performance to desired rewards.

Need For Affiliation

A psychological drive that motivates individuals to seek social connections, acceptance, and relationships with others.

Adams' Theory

Refers to Equity Theory, proposed by J. Stacy Adams, which suggests that individuals are motivated by fairness in their work relationships and will adjust their input to maintain equity.

Restoring Equity

The process of attempting to balance perceived disparities in fairness or distribution of resources within social or organizational contexts.