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14 December, 13:34

A governmental fund Statement of Revenues, Expenditures, and Changes in Fund Balances reported expenditures of $30 million, including capital outlay expenditures of $5 million. Capital assets for that government cost $90 million, including land of $10 million. Depreciable assets are amortized over 20 years, on average. The reconciliation from governmental changes in fund balances to governmental activities changes in net assets would reflect a (an) :

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  1. 14 December, 16:28
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    Increase of $1 million.

    Explanation:

    Depreciation expense = (Capital assets cost - Land cost) : Average Years

    = (90 - 10) : 20

    = $4 million

    Reconciliation from governmental changes in fund balances to governmental activities changes in net assets would reflect:

    = capital outlay expenditures - Depreciation expense

    = 5 million - 4 million

    = $1 million

    Therefore, there is an increase of $1 million.
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