Question

(Encumbrance journal entries)

Prepare journal entries to record the following transactions for the village of Radnor. Classify the expenditures as Parks supplies.

1. Placed purchase order 960 for supplies in the amount of $8,000 and purchase order 961 for supplies in the amount of $6,000. The purchase orders allowed the suppliers to ship and bill for additional quantities, up to 5 percent of the order.

2. Received the supplies ordered on purchase order 960, together with an invoice for $8,300. The supplies, including the additional quantities, were accepted, and a voucher was prepared for $8,300.

3. Received all the supplies ordered on purchase order 961, together with an invoice for $5,800. The supplier said that production costs were less than anticipated, and it was passing the lower cost on to Radnor. A voucher for $5,800 was prepared.

4. The voucher for $8,300 was paid.

Thanks!

Answer 1

ensure P. No.1 According to data :- » Government entities uce budgetary accounting that they do not Overspend their budget. Under this method of accounting, an encumbrance is recorded for each purchase order issued by » Encumbrances recorded under the budgetary accounting method are appropriation of funds available with a government entity government entity. Prepare the Journal entries to record the placement of the purchase orders by debiting encumbrances and Crediting budgetary fand balance reserved for encumbrances Debit Credit 8,000 Account Title & explanation Encumbrances (puchove endex 960) Budgetary fund Balance reserved for encumbrances 8,000

P. 2 To record encumbrance for purchase Order 960) Encumbrances purchase Order 961) 6,000 Budgetary Fund Balance 6,000 Reserved for encumbrances fro record encumbrance for parchase order 961) The Journal entries above appropriate amounts equal to the amount of purchase order from the fund available with the government for appropriations to the fund reserved for encumbrances. Prepare the journal entries to record the receipt of supplies ordered on purchase order 960 and the preparation of voucher for payment follows :-

P.3 Account Titles and explanation rebait (8) Credit($) Budgetary fond Balance 8,000 Recorved for Encumbiances 8,000 Encumbrances Go reverse encumbrance Created for purchase order 960) 8,300 8,300 Expenditures parks Supplies vouchers payable fro record expenditure for purchased parks Supplies) The first towind entry reversed the encumbrances Greated at the time of issue of purchase order 960 and the Second Journal entry records the expenditure for parks Supplies.

P.4 Prepare the Journal entries to the record the receipt of Supplies Ordered on Purchase order 961 and the prepoolation of voucher for payment as follows :- Accomo Title and explanation Debit ($) Credit (A Budgetary fund Balance Reserved 6,000 for Encumbrances 6,000 Encumbrances to reverse encumbrance Created for purchase ordey 961) Expenditures parts supplies 5,800 Voucher payable 5,800 record enpenditene for purchased parts supplies) The first Journal entry reverse the encumbrance Geated at the time of issue of purchase order 961 and the second Journal entry records the parts supplies. expendituere for

P.5 Prepare the Journal entry to record the payment of the voucher by debiting vouchers payable and Crediting Cash 8,300 Account Title and explanation Voucher payable Cach to record payment on vouchers) 8,300 The Journal entry above indicates payment The voucher payable Created agained the expenditure incurred through purchase Order 960. please vote positively. It's help me a lot any doubly Comment below. and