Question

(Budgetary transactions and events)

Prepare journal entries to record the following transactions and events that occurred in Marilyn County during the calendar year 2019.

1. The legislature adopted the following budget:

Estimated revenues and other sources:
Property taxes	$1,740,000
Sales taxes	1,000,000
Use of fund balance	10,000
Total	$2,750,000
Appropriations:
General government – salaries	$420,000
General government – supplies	30,000
Parks department – salaries	2,000,000
Parks department – plants and supplies	300,000
Total	$2,750,000

2. Parks department placed PO 2019-1 for shrubbery in the amount of $52,000 and PO 2019-2 for gardening supplies in the amount of $11,000. The orders were charged to the appropriation for Parks department – plants and supplies.

3. The supplier delivered the shrubbery ordered on PO 2019-1; howver, the supplier said he could not deliver some of the shrubs because he no longer carried them. The invoice for $49,000 was approved and forwarded to the comptroller’s office for payment; the rest of the order ($3,000) was cancelled.

4. The supplier delivered the gardening supplies ordered on PO 2019-2. She sent an invoice for $11,200 because some of the items were of a higher quality than ordered. The Parks department accepted the entire delivery and forwarded the invoice for payment.

5. Based on a mid- year review of economy, the finance director concluded that sales tax revenues would be less than the original estimate. As a result, the legislature amended the budget, reducing the sales tax estimate by $50,000 and the Parks department – plants and supplies appropriation by $35,000.

(Preparation of appropriations ledger)

Prepare an appropriations ledger similar to Table 3-6 to record the transactions and events applicable to the appropriation for Parks department – plants and supplies in the Problem above. The ledger should have columns for appropriation (Cr.), encumbrances (Dr. and Cr.), expenditures (Dr.), and available appropriation (Cr.).

Thank you.

Answer 1

Journal Entries

	Dr ($)	Cr ($)
Shrubbery Account	52000
To Parks department-Plants and Supplies		52000
(Being PO 2019-1 placed for shrubbery)
Gardening Supplies	11000
To Parks department-Plant and Supplies		11000
(Being PO 2019-2 placed for gardening supplies)
Parks department - Plant and Supplies	3000
To Shrubbery		3000
(Being entry reversed due to cancellation of order to the extent of $ 3000)
Gardening Supplies	200
To Parks department - Plant and Supplies		200
(Being difference of $ 200 recorded for higher quality )

Appropriation table

General government - salaries	420000	0	0	420000
General governement - supplies	30000	0	0	30000
Park Department - Salaries	200000.0	0	0	2000000
Park Department - Plant and Supplies	300000	+ 3000	- 63200	239800
Expenditure
Shruberry		+49000		49000
Gardening Supplies		+11200		11200
Total				2750000