Assume a government reported $300,000 in capital outlay expenditures in the governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances. Secondly, assume current year depreciation of capital assets amounted to $250,000, in the governmental activities column in the Statement of Activities. Those adjustments would cause a decrease of $50,000 when preparing the reconciliation between the change in governmental fund balances to the change in net position of governmental activities in the Statement of Activities.

Question

Quizplus · Accepted Answer

The reconciliation begins with Net change in fund balance which would be increased by the amount of the capital outlay and decreased by the amount of the depreciation expense.

Assume a Government Reported $300,000 in Capital Outlay Expenditures in the Governmental