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Prepare the journal entry for the purchase of inventories

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Reference no: EM133087747

Questions -

Q1-Assume that a city approves the following budget for the year:

Estimated revenues $136,540

Estimated other financing sources 32,000

Appropriations (148,890)

Net change in fund balance $19,650

Required - Prepare the journal entry to record the budget.

Q2. Assume that a town places an order for a truck with an estimated cost of $39,850. When the truck is delivered, the actual cost is $45,600.

Required - Prepare the journal entry to record the issuance of the purchase order and its payment when the truck is delivered.

Q3. Hamilton Township needs to make its closing entries to close out its budgetary and operating accounts. Assume that Hamilton Township has a balance remaining of $275,000 in encumbrances outstanding as of the end of the year. The outstanding invoices are expected to be honored in the next fiscal year.

Required - Prepare the journal entries to close the encumbrance account.

Q4. Assume that a town sells a truck that it had originally purchased for $65,000 for a cash sale price of $30,000.

Required - Prepare the journal entry to record the sale.

Q5. Assume that a city issues a $1,200,000 bond at par. The city, subsequently, pays $72,000 in interest on the bond and $1,200,000 of the principal.

Required - Prepare the journal entries to record the issuance of the bond and the subsequent payments.

Q6. Assume that a town leases equipment on a capital lease. The present value of the leased equipment is $65,000. The city, subsequently, pays $6,500 on the lease, $3,900 of which is designated as interest and the remainder to a reduction of the lease obligation:

Required - Prepare the journal entry to record the acquisition of equipment via lease and the subsequent payment.

Q7. Assume that a town purchases $11,000 of supplies on account toward the end of the year. A year-end audit reveals that $3,000 of the inventories remain unused.

Required - Prepare the journal entry for the purchase of the inventories and the year-end adjusting entry, assuming that the purchases method is used.

Q8. Assume that a town purchases $11,000 of supplies on account toward the end of the year. A year-end audit reveals that $3,000 of the inventories remain unused.

Required - Prepare the journal entry for the purchase of the inventories and the year-end adjusting entry assuming that the consumption method is used.

Reference no: EM133087747

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