In the Town of Clementville, the following general capital assets were owned: Town buildings 3,250,000; Intangible assets 1,000,000; Streets, sidewalks, and water lines 2,000,000. What amount should be recorded as capital assets in the town's governmental activities?

• A. 6,000,000
• B. 6,250,000
• C. 5,250,000
• D. 7,250,000

Answer: (B)

In government-wide financial statements, capital assets include both tangible assets (like buildings and infrastructure) and intangible assets that the government controls and expects to provide future benefits. All three categories listed—town buildings, streets/sidewalks/water lines, and intangible assets—meet that criterion, so they are all included in capital assets. Adding them up gives 3,250,000 + 2,000,000 + 1,000,000 = 6,250,000. The amount recorded as capital assets in governmental activities is 6,250,000.