Listed below are four accounts from a governmental fund operating statement. Discuss how and why these accounts will be adjusted when preparing the operating statement conversion worksheet for governmental activities. If no adjustments are required, explain why.
Expenditures—Capital Outlay—Equipment . . . . . . . . . . . . . . . . . . $ 500,000
Expenditures—Current—General Government . . . . . . . . . . . . . . . 1,800,000
Other Financing Sources—Bonds . . . . . . . . . . . . . . . . . . . . . . . . . 3,000,000
Other Financing Sources—Proceeds from sale of equipment . . . . 30,000
Assume the cost of the equipment sold was $185,000 and the accumulated depreciation was $170,000.