Question

Preparation of appropriations ledger The following transactions and events that occurred in the village of Kowitt Gorge during the calendar year 2019: 1. The village commissioners adopted the following budget: Estimated revenues: Property taxes $1,850,000 All other revenues 300,000 Total revenues $2,150,000 Appropriations: All departments other than police $1,000,000 Police-salaries 600,000 Police-fringe benefits 450,000 Police-supplies 80,000 Total appropriations $2.130,000 2. The village received, in cash, property taxes of $1,840,000 and all other revenues of $295,000. 3. The village made cash payments, charging the following appropriations: All departments other than police $1,000,000 Police-salaries 595,000 Police-fringe benefits 390,000 4. The administrator of fringe benefits received an invoice for police employee health insurance in the amount of $95,000, together with a letter from the insurance provider, explaining that the large increase was caused by a change in federal laws. The invoice could not be paid because the Police-fringe benefits appropriation had a hala fu

Answer 1

Answer:

Appropriations Ledger
Appropriation: Police - fringe benefits
Transaction	Appropriation	Encumbrances		Expenditures	Available
	Cr.	Dr.	Cr.	Dr.	Appropriation
1	450,000	-	-	-	450,000
2					450,000
3	-	-	-	390,000	60,000
4	35,000	-	-	-	95,000
5	-	-	-	95,000	-
6	-	-	-	-	-
7	-	-	-	-	-
8	-	-	-	-	-

Calculation

Available Appropriation = Available Appropriation (1)+Appropriation Credit -Encumbrances Dr +Encumbrances Cr -Expenditures Dr

Explanation

1. Budget : Police—fringe benefits Appropriation = 450,000

2. No Police—fringe benefits

3. Cash Payment : Police—fringe benefits,  So expenditure- 390,000

4. Budget Amendment : Increase in Appropriation for police—fringe benefits, so Appropriation- 35,000

5.  Cash Payment : village paid the invoice —fringe benefit, So expenditure- 95,000

6. No Police—fringe benefits

7. No Police—fringe benefits

8. No Police—fringe benefits

Answer:

Appropriations Ledger
Appropriation: Police - Supplies
	Appropriation	Encumbrances		Expenditures	Available
Transaction	Cr.	Dr.	Cr.	Dr.	Appropriation
1	80,000				80,000
2					80,000
3					80,000
4	(25,000)				55,000
5					55,000
6		50,000			5,000
7		2,000			3,000
8			20,000		23,000
				20,000	3,000

Calculation

Available Appropriation = Available Appropriation (1)+Appropriation Credit -Encumbrances Dr +Encumbrances Cr -Expenditures Dr

Explanation

1. Budget : Police—supplies Appropriation = 80,000

2. No Police—supplies

3. No Police—supplies

4. Budget Amendment : Decrease in Appropriation for police—supplies, so Appropriation : -25,000

5.  No Police—supplies

6. Encumbrances for Police—supplies : 20,000+30,000 = increases by 50,000

7. Encumbrances for amendment to PO Police—Supplies - increasing it by $2,000

8a. Reverse Encumbrances - so decrease of 20,000

8b. Expenditure for PO 2019b - 20,000