Question

Part V. Appropriations/Encumbrances/Expenditures The City of Arcadia Police Department gets an annual appropriation from the City for "Weapons and Miscellaneous" during 2013. Use encumbrances accounting. Prepare General fund journal entries to record the following transactions related to the appropriation received by the Police Department: The department received an appropriation allocation of $100,000. (Dr. "Budgetary Fund Balance" to make the entry balance.) a b. The department issued a purchase order for $8,000 for new handguns. C. The vendor sent the handguns and an invoice for $8,400, stating that a recent design changed provided greater accuracy at long range. The department approved the invoice for payment within 30 days. d. The Arcadia Comptroller paid the invoice received in c., above.

Answer 1

40 Credit 41 42 a) 43 In the Books of City of Arcadia police department Account Title & Explanation Budgetary Fund Balance Appropriations (To record Budget) Debit 100,000 100,000 44 45 46 b) 47 8,000 Encumbrances Fund Balance Reserve for Encumbrances (To record purchase orders) 8,000 48 8,000 8,400 Fund Balance Reserve for Encumbrances Expenditures Encumbrances Voucher Payable (To record invoice received) 8,000 8,400 49 50 C) 51 52 53 54 55 56 d) 57 58 59 60 e) 61 8,400 Voucher Payable Cash (To record payment of invoice) 8,400 20,000 Encumbrances Fund Balance Reserve for Encumbrances (o record nurchase orders) 20,000 62

64 f) 20,000 65 Fund Balance Reserve for Encumbrances Encumbrances (To record cancellation of orders) 20,000 66 67 68