A city orders a new computer for its General Fund at an anticipated cost of $88,

Question

A city orders a new computer for its General Fund at an anticipated cost of $88,000. Its actual cost when received is $89,400. Payment is subsequently made.

Prepare all required journal entries for both fund and government-wide financial statements.

1. Record the receipt of computers and the accompanying liability – Governmental Activities

2.Record payment made - Governmental Activities

3.Record payment made for computers - General Fund.

4.Record entry to remove encumbrance for computers that has now been received - General Fund.

5.Record the receipt of computers and the accompanying liability - General Fund.

6.Record payment made - General Fund.

A city orders a new computer for its General Fund at an anticipated cost of $88,000. Its actual cost when received is $89,400. Payment is subsequently made.

Explanation / Answer

SOLUTION:

GOVERNMENT-WIDE FINANCIAL STATEMENTS Government Activities Particulars Debit Credit 1 Computer 89,400 Vouchers (or Accounts) Payable 89,400 2 Vouchers (or Accounts) Payable 89,400 Cash 89,400 FUND-BASED FINANCIAL STATEMENTS GENERAL FUND 3 Encumbrances Control 88,000 Fund Balance - Reserved for Encumbrances 88,000 4 Fund Balance - Reserved for Encumbrances 88,000 Encumbrances Control 88,000 5 Expenditures Control 89,400 Vouchers Payable 89,400 6 Vouchers Payable 89,400 Cash 89,400

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