A governmental fund's Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures of $40 million, including capital outlay expenditures of $12 million. Capital assets for that government cost $80 million, including land in the amount of $10 million. Depreciable assets are amortized over 10 years, on average. The reconciliation from governmental fund changes in fund balances to governmental activities change in Net Position would reflect aan):

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$12,000,000 of capital outlay expenditures would be an addition and $7,000,000 of depreciation expense would be a subtraction which result in a $5,000,000 increase. Depreciation expense: $80,000,000 - $10,000,000)/10 years = $7,000,000.

A Governmental Fund's Statement of Revenues, Expenditures, and Changes in Fund