Question

Part V. Appropriations/Eneumbrances/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.) 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

	Particulars	Debit (in $)	Credit (in $)
a)	Bank	100,000
	Budgetary Fund Balance		100,000
c)	Purchase	8400
	Accounts Payable		8400
d)	Accounts Payable	8400
	Bank		8400
e)	Accounts Payable	37,000
	Bank		37,000
f)	Salaries And Wages	150,000
	Bank		150,000
g)	Cash	10,000
	Accounts Payable-Square bank		10,000

Note:

A) For the closing entry

1. First, all revenue accounts are transferred to income summary. This is done through a journal entry debiting all revenue accounts and crediting income summary.
2. Next, the same process is performed for expenses. All expenses are closed out by crediting the expense accounts and debiting income summary.
3. Third, the income summary account is closed and credited to retained earnings.

B) It is assumed that the money granted in part a was in bank account

C) For the parts, b,e,and f, no entries will be passed as it is only a purchase order, and no tranfer of goods and services or cash has taken place.