Question

Washington County's capital projects fund was established on January 1, 2018. On that date, the capital projects fund purchased $2,000 of supplies. On December 31, 2018, the capital projects fund had $500 of supplies remaining. Assuming that the capital projects fund did not purchase any additional supplies during 2018, and that the capital projects fund uses the consumption method for accounting for supplies, what should the supplies expenditure be for the capital projects fund for 2018?

Answer 1

Particulars	Amount ($)
Purchased supplies for the capital project on 01/01/ 2018	2000
Less: Supplies remaining at the closing inventory as on 31/12/2018	500
Supplies expenditure for the capital projects fund for 2018	1500

In case of use of consumption method of accounting for supplies the actual amount of consumption of supplies shall be determined to ascertain the amount to be debited for the supplies expenditures of the capital projects fund for 2018. Thus, from the total amount of purchase of supplies the closing balance of supplies has been deducted to calculate the supplies expenditures for the capital projects fund for 2018.