On July 12, 2011, Fred City ordered a new computer at an anticipated cost of $11

Question

On July 12, 2011, Fred City ordered a new computer at an anticipated cost of $114,400. The computer was received on July 16 with an actual cost of $116,220. Payment was subsequently made on August 15, 2011.

Required:

(A.) Prepare all the required journal entries and identify the type of fund in which each entry was recorded for the Fund Financial Statements.
(B.) Prepare all the required journal entries and identify the type of fund in which each entry was recorded for the Government-Wide Financial Statements.

Explanation / Answer

(A.) Prepare all the required journal entries and identify the type of fund in which each entry was recorded for the Fund Financial Statements.

12 Jul Encumberances Dr 114,400

Reserve for encumberances Cr 114,400

(B.) Prepare all the required journal entries and identify the type of fund in which each entry was recorded for the Government-Wide Financial Statements.

16 Jul Reserve for encumebrance Dr 114,400

Encumberance Cr 114,400

16 Jul Expendiiture Dr 116,220

Voucher payable Cr 116,220

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