Reference no: EM132379002

Question

Prepare the journal entries for the following transactions. Reclass entries should be posted to Fund Balance Assigned.

A) For Year 1: Prepare journal entries for the following transactions.

B) For Year 2: Prepare journal entries assuming appropriations lapse

C) Provide a Balance Sheet as of the end of year 2.

(assume all beginning balances are zero)

Year 1

1. The city budgets estimated revenues of $12,700 and appropriations of $11,600.

2. The city issues purchase orders for goods and services, $8,000.

3. Of the goods and services ordered, the city received (and used) goods and services totally 90% of the order. Actual cost was $7,100. (paid in cash). The remaining goods and services are expected to be received next year.

4. Actual revenues for the year (all in cash) are $13,000.

5. The city closes/reclasses the accounts at year-end.

Year 2

6. The city budgets estimated revenues of $10,500 and appropriations of $9,900.

7. The city restores encumbrances of the previous year (if applicable).

8. The city received (and used) all goods and services ordered in the previous year. Actual cost was only $800 (paid in cash).

9. The city incurred and paid for recurring expenditures totally 5,000. These funds were not encumbered.

10. Actual revenues for the year (all in cash) are $11,300.

11. The city closes/reclasses the accounts at year-end.