Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?
Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Please Explain Proper Step by Step and Do Not Give Solution In Image Format And Fast Answering Please Thanks In Advance ?

Transcribed Image Text:The City of Batavia ordered new computer equipment for $30,000 on November 3, 20X2. The equipment had not been received by
December 31, 20X2, Batavia's fiscal year-end.
Required:
a. Assume that the city has a policy that outstanding encumbrances lapse at year-end.
Note: If no entry is required for a transaction/event, select "No journal entry required" in the first account fleld.
1. Prepare the entry to record the encumbrance on November 3, 20X2.
2. Prepare the entries required on December 31, 20X2.
3. Assuming that the city council accepts outstanding encumbrances in its budget for the next fiscal period (20X3), prepare entries
on January 1, 20X3.
4. Prepare entries on January 18, 20X3, when the equipment was received with an invoice cost of $30,600 and accepted by the
city.
5. Prepare the entry on December 31, 20X3, to close the expenditures account.
View transaction list
Record the entry for the equipment order and
encumbrances in 20X2.
2 Record the entry to chase the remaining budgeted
encumbrances in 20XZ.
3 Record the entry to reserve the actual fund balance for
the outstanding encumbrances at year-end in 20X2.
Record the entry to reverse the prior-year encumbrance
reserve in 20X3.
5 Record the entry to establish the budgetary control over
the encumbrances renewed from the prior year in 20X3.
Note:
= journal entry has been entered
Record entry
Clear entry
r
(1
X
Debit Credit
View general journal

Transcribed Image Text:4
6
the outstanding encumbrances at year-end in 20X2.
5 Record the entry to establish the budgetary control over
the encumbrances renewed from the prior year in 20X3.
7
Record the entry to reverse the prior-year encumbrance
reserve in 20X3.
Record the entry to remove the budgetary reserve for the
venth
goods received in 20X3.
Record the expenditure for the goods received at the
actual cost in 20X3.
8 Record the entry to close the 20X3 expenditures account.
Note :
= journal entry has been entered
Record entry
Clear entry
K
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