Question

A city orders a new computer for its General Fund at an anticipated cost of $88,000. Its actual cost when received is $89,400. Payment is subsequently made.

a.

Prepare all required journal entries for both fund and government-wide financial statements. 1. Record the receipt of computers and the accompanying liability – Governmental Activities 2.Record payment made - Governmental Activities 3.Record payment made for computers - General Fund. 4.Record entry to remove encumbrance for computers that has now been received - General Fund. 5.Record the receipt of computers and the accompanying liability - General Fund. 6.Record payment made - General Fund.

Answer 1

SOLUTION:

	GOVERNMENT-WIDE FINANCIAL STATEMENTS
	Government Activities
	Particulars	Debit	Credit
1	Computer	89,400
	Vouchers (or Accounts) Payable		89,400
2	Vouchers (or Accounts) Payable	89,400
	Cash		89,400
	FUND-BASED FINANCIAL STATEMENTS
	GENERAL FUND
3	Encumbrances Control	88,000
	Fund Balance - Reserved for Encumbrances		88,000
4	Fund Balance - Reserved for Encumbrances	88,000
	Encumbrances Control		88,000
5	Expenditures Control	89,400
	Vouchers Payable		89,400
6	Vouchers Payable	89,400
	Cash		89,400