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CITY OF LINO LAKES, MINNESOTA <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1983 <br />Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Continued <br />INVENTORY <br />The inventory of the Proprietary Fund is stated at the lower of cost or market <br />on the first -in, first -out basis. <br />PROPERTY, PLANT, AND EQUIPMENT <br />General Fixed Assets. Roads, bridges, curbs and gutters, streets and sidewalks, <br />and drainage systems are not capitalized. The fixed assets are valued at cost <br />or estimated replacement value as of December 31, 1975. Additions since 1975 <br />are stated at cost. The policy of stating such assets at other than cost is at <br />variance with generally accepted accounting principles. These assets are not <br />accounted for in detailed inventory records. <br />Proprietary Fund Assets. Fixed assets related to the proprietary fund are <br />accounted for in that fund. They are valued at actual or estimated original <br />cost. Depreciation of all exhaustible fixed assets of this fund is charged as <br />an expense against operations. Accumulated depreciation is reported on that <br />fund's balance sheet. Depreciation is based upon the estimated useful lives of <br />the assets using the straight -line method. Depreciation on contributed assets <br />charged to operations is closed to the contributed equity account. The esti- <br />mated useful lives are as follows: <br />Well 20 Years <br />Buildings 25 Years <br />Equipment 5 - 10 Years <br />Water and sewer system 50 Years <br />A summary of proprietary fund type property, plant, and equipment at December <br />31, 1983, follows: <br />Water and Sewer <br />Enterprise <br />Well $ 18,500 <br />Buildings 48,690 <br />Equipment 14,821 <br />Water and sewer system 955,502 <br />Total 1,037,513 <br />Less: Accumulated depreciation 143,734 <br />Net $ 893,779 <br />