Question

Shoshone County uses the consumption method to account for supplies. At the beginning of the year the city had no supplies on hand. During the year the city purchased $450,000 of supplies for use by activities accounted for in the general fund. The city used $300,000 of those supplies during the year. At fiscal year-end, the appropriate account balances on the general fund financial statements would be a) Expenditures $450,000; Supplies inventory $150,000. b) Expenditures $450,000; Supplies inventory $0. c) Expenditures $300,000; Supplies inventory $150,000. d) Expenditures $300,000; Supplies inventory $0.

Answer 1

Answer:

a) Expenditures $450,000; Supplies inventory $150,000

Explanation:

At fiscal year-end, the appropriate account balances on the general fund financial statements would be:

Supplies for use by activities accounted for in the general fund $450,000

Less supplies used during the year $300,000

Balance =$150,000

Hence;

Expenditures $450,000; Supplies inventory $150,000