Answer:
1)
1. Dr Encumbrances $537,000
Cr Reserve for Encumbrances $537,000
2. Dr Reserve for Encumbrances $222,000
Cr Encumbrances $222,000
Dr Expenditures – Capital Outlay - Trucks $222,000
Cr Vouchers Payable $222,000
3. Dr Reserve for Encumbrances $302,000
Cr Encumbrances $302,000
Dr Inventory – Materials and Supplies $301,800
Cr Vouchers Payable $301,800
4. Dr Vouchers Payable $523,800
Cr Cash $523,800
5. Dr Inventory -Materials and Supplies $12,000
Cr Expenditures – Materials and Supplies $12,000
2) $511,800
3) $102,000
Explanation:
1) To Record the transactions in the General Fund General Ledger of Benford Township using the consumption method and to Record both the budget-ary and actual journal entries.
1. Preparation of the journal entry if The town ordered Garbage vehicles of the amount of $225,000 and Supplies of the amount of $312,000
Dr Encumbrances $537,000
Cr Reserve for Encumbrances $537,000
($225,000+312,000)
2. Preparation of The journal entry if The actual cost of the amount of $222,000 was vouchered for payment.
Dr Reserve for Encumbrances $222,000
Cr Encumbrances $222,000
Dr Expenditures – Capital Outlay - Trucks$222,000
Cr Vouchers Payable $222,000
3. Preparation of the journal entry if The town received most of the supplies ordered (estimated cost of the amount of $302,000) while The actual cost was the amount of $301,800.
Dr Reserve for Encumbrances $302,000
Cr Encumbrances $302,000
Dr Inventory – Materials and Supplies $301,800
Cr Vouchers Payable $301,800
4. Preparation of the journal entry if The town paid the amount of $523,800 of vouchers payable.
Dr Vouchers Payable $523,800
Cr Cash $523,800
5. Preparation of the Journal entry if At year end, the town had supplies on hand costing the amount of $102,000
Dr Inventory -Materials and Supplies $12,000
Cr Expenditures – Materials and Supplies $12,000
($523,800-$511,800)
2) Computation for the amount of expenditures to be reported in the school district General Fund statement of revenues, expenditures, and changes in fund balance
EXPENDITURES
Capital Outlay $222,000
Materials and Supplies:
Beginning Inventory $90,000
Purchases$301,800
Total Available$391,800
Less Ending Inventory ($102,000)$289,800
($391,800-$102,000)
Total $511,800
($222,000+$289,800)
Therefore the amount of expenditures to be reported in the school district General Fund statement of revenues, expenditures, and changes in fund balance is $511,800.
3) Based on the information given we were told that At the end of the year the town had supplies on hand costing the amount of $102,000 which means that The amount of nonspendable fund balance to be reported at year end will equal to Inventory on hand of the amount of $102,000.
