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.