P11-2(Accounting cycle for 1 month) The Star Exploration Agency, a unit of the S
ID: 2577061 • Letter: P
Question
P11-2(Accounting cycle for 1 month)
The Star Exploration Agency, a unit of the Space Department, was established by Congress to begin operations at the beginning of fiscal year 2014. Following are the agency's transactions during October, its first month of operations:
October 1Congress passed and the president approved a $1,000,000 appropriation for this agency.
October 1Of the amount appropriated, $950,000 was apportioned by the OMB.
October 1The Space Department allotted the agency $100,000 to carry out its October operations.
October 1Purchase requests were made for materials and supplies, estimated to cost $88,000.
October 4Purchase orders were placed for materials and supplies, estimated to cost $85,000. The other requests (for $3,000) were cancelled.
October 10Materials and supplies previously ordered were received, together with invoices for $80,000. All items received were placed in inventory. The remaining items (for $5,000) will be received at a later date.
October 14A disbursement schedule was sent to the Treasury, requesting that it pay invoices amounting to $80,000.
October 24The Treasury informed the agency that it had paid invoices amounting to $76,000.
October 31An inventory count showed that $15,000 of materials and supplies was on hand. The rest was used in operations.
Use the preceding information to do the following:
a.Prepare journal entries to record the events of October.
b.Prepare a preclosing trial balance.
Explanation / Answer
E11-9 Journal Entries Account Name DR CR 1 Budgetary entry: Budgetary other appropriations realized 400,000 400,000 to record receipt of appropriator authority. Proprietary entry: Proprietary Fund Balance with Treasury 400,000 Unexpended appropria±ons—appropria±ons received 400,000 to record receipt of appropriator warrant. 2 Budgetary entry: Budgetary Unappor±oned authority 400,000 400,000 to record appor±onment of resources by OMB. Proprietary entry: none 3 Budgetary entries: Budgetary Appor±onment 400,000 Allotments - realized resources 400,000 To record allotment of resources to ²nance operators. Proprietary entry: None 4 Budgetary entry: Budgetary Allotments-realized resources 390,000 Commitments 390,000 to record request for materials. Proprietary entry: None 5 Budgetary entry: Budgetary Commitments 375,000 375,000 to obligate funds for materials ordered. Proprietary entry: NONE 6 Budgetary entries: Budgetary Undelivered orders-obligators, unpaid 360,000 Delivered orders—obligators, unpaid 360,000 to record acceptance of delivery. Proprietary entry: Operand materials and supplies held for use 360,000 360,000 To record acceptance of materials 360,000 Unexpended appropriators—used Expended appropriators 360,000 360,000 7 Budgetary entry: None Proprietary entry: Proprietary Program costs - materials 140,000 Operand materials and supplies held for use 140,000 8 Budgetary entry: Proprietary entry: Proprietary accounts payable 360,000 Disbursements in transit 360,000 To record request to Treasury for check.
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