Question

The Fire Department of a given city received an appropriation in the amount of $15,000,000 for the fiscal year ended June 30, 2017. During the month ended July 31, 2017, the following transactions occurred: (a) purchase orders were issued in the amount of $650,000; (b) purchase orders, related to (a) above, were filled in the amount of $640,000; the related invoice amount was $635,000; invoices were paid in the amount of $620,000; (c) salaries were accrued and paid in the amount of $675,000. The balance available for the fire department as of July 31, 2017 is:

Answer 1

Answer: $13,680,000

Explanation:

Given that,

Appropriation received(Budget) = $15,000,000

(a) purchase orders = $650,000

(b) purchase orders, related to (a) = $640,000

   Related Invoice amount = $635,000

   Invoices were paid in the amount = $620,000

(c) salaries accrued and paid(Payroll) = $675,000

Balance available for the fire department as of July 31, 2017:

= Budget - purchase orders(debit) + purchase orders(credit) - (Invoice payment) - payroll(expenditure)

= $15,000,000 - $650,000 + $640,000 - ($15,000 + $620,000) - $675,000

= $13,680,000