Question

The Town of Hail had the following transactions.

1. Placed a purchase order in the amount of SAR 14,000 for supplies.
2. Placed a purchase order with a car dealer to replace the town’s only police car. The expected cost of the car is SAR 31,000.
3. The police car was delivered to town officials with an invoice of SAR 32,500. The invoice was approved and paid.
4. Unfortunately, some of the supplies ordered (in #1) were backordered and could not be shipped. However, supplies that were expected to cost SAR 8,000 were received along with an invoice of SAR 7,900. The invoice was paid when received.
5. The remaining supplies that were ordered (in #1) were received. The invoice in the amount of SAR 6,000 was paid.

            Required:

Prepare the general journal entries necessary to record the budget and operating transactions 1- 5.

Answer 1