Reference no: EM133155263

Question - Purchase method - Assume that $8,000 in supplies were on hand at the beginning of the year

Transactions:

1. Ordered supplies with an estimated cost of $108,000.

2. Received supplies with an actual invoice cost of $91,500 (estimated cost 90,900). No payment was made upon receipt.

3. Paid $79,000 on account for supplies received in #2.

4. Received the rest of the supplies ordered in #1. (actual = estimated). No payment was made upon receipt.

5. During the year, the inventory warehouse (not an ISF, just part of the general fund) issued $83,000 in supplies to general government departments.

6. Paid all remaining amount due for supplies to vendor.

7. The ending physical inventory of General Fund supplies was $31,000 on hand at year end (Some supplies were damaged. No journal entry necessary for damaged supplies.) The General Fund does not consider inventory to be substantial.

Required -

Purchases method of accounting for inventory

Prepare the general journal entries required to account for the previous information.