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CITY OF LINO LAKES, MINNESOTA <br />Page 9 of 19 <br />NOTES TO FINANCIAL STATEMENTS <br />December 31, 1986 <br />Note 2 - DETAIL NOTES ON ALL FUND AND ACCOUNT GROUPS (Continued) <br />INVENTORIES <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 />FIXED ASSETS <br />FIXED ASSETS - GENERAL <br />General fixed assets are recorded as expenditures of the governmental funds at <br />the time of purchase. Such assets are valued at cost or estimated replacement <br />value as of December 31, 1975. Additions since 1975 are stated at cost. These <br />assets are capitalized in the general fixed assets group of accounts except for <br />certain improvements (roads, bridges, curbs, gutters, streets, sidewalks, <br />drainage system and lighting systems) which are not capitalized. Gifts or <br />contributions are recorded in general fixed assets at fair market value at the <br />time received. No depreciation has been provided on general fixed assets. <br />A summary of changes in General Fixed Assets is as follows: <br />Balance Balance <br />1/1/86 Additions Deletions 12/31/86 <br />Land $ 151,629 $ 147,314 $ 298,943 <br />Wells 6,216 6,216 <br />Buildings & improvements 516,163 516,163 <br />Furniture & equipment 383,854 104,025 487,879 <br />Totals <br />$1,057,862 $ 251,339 $ -0- $1,309,201 <br />The City does not maintain detailed records nor accounting controls over <br />general fixed assets. The amounts presented in the Statement of General Fixed <br />Assets represent amounts accumulated from historical financial reports only, <br />without regard to physical inventories or listings. <br />FIXED ASSETS - PROPRIETARY FUNDS <br />Fixed assets of the proprietary funds (Water and Sewer) are stated at cost, <br />estimated cost, or in the case of contributions, at fair market value at the <br />time received. Depreciation has been provided using the straight -line method <br />over the estimated useful lives of assets, as follows: <br />Assets <br />Purchased assets: <br />Water and sewer <br />Depreciable Lives <br />Depreciation <br />1986 1985 <br />5 -25 years $ 984 $ 984 <br />Contributed assets: <br />Water and sewer 20 -50 years 22,530 22,530 <br />Totals $ 23,514 $ 23,514 <br />