Question

The town of Stow reports a net increase in its governmental funds of $15,000. During the year, it purchased a truck for $50,000 and recognized $2,000 for depreciation expense. In its Statement of Activities for the year, what amount should it report for the change in net position?

A. $15,000.
B. $17,000.
C. -$33,000.
D. $33,000.

Answer 1

The town of Stow should report a change in net position of -$33,000 in its Statement of Activities for the year. The correct option is C.

Step-by-step explanation:

The amount that the town of Stow should report for the change in net position in its Statement of Activities for the year can be calculated by subtracting the expenses from the revenues.

In this case, the expenses are the purchase of the truck and the depreciation expense, totaling $52,000 ($50,000 + $2,000). The net increase in governmental funds is $15,000, so the change in net position is $15,000 - $52,000 = -$37,000. Therefore, the correct answer is C. -$33,000.