Provide the required adjusting entries at the end of 2011, assuming that the December 31, 2011, balance of Inventory of Supplies has been confirmed by physical count. Make entries in the general journals of both the General Fund (omitting subsidiary detail) and governmental activities at the government-

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
amounts to the nearest dollar.)
4-5 Adjusting Entries for Inventory of Supplies. The Village of Baxter uses the
purchases method of accounting for its inventories of supplies in the General
Fund. GASB standards, however, require that the consumption method be used
for the government-wide financial statements. Because its computer system is
very limited, the Village uses a periodic inventory system, adjusting inventory
balances based on a physical inventory of supplies at year-end. When supplies
are received during the year, the Village records expenditures and expenses in
the general journals of the General Fund and governmental activities, respee-
tively. The Village's inventory records showed the following information for the
fiscal year ending December 31, 2011:
Balance of inventory, December 31, 2010
Purchases of inventory during 2011
Balance of inventory, December 31, 2011
$140,000
720,000
155,000
Required
a. Provide the required adjusting entries at the end of 2011, assuming that the
December 31, 2011, balance of Inventory of Supplies has been confirmed by
physical count. Make entries in the general journals of both the General Fund
(omitting subsidiary detail) and governmental activities at the government-
wide level.
b. Assume that the General Fund uses the consumption method for reporting
inventories of supplies rather than the purchases method. Make the required
adjusting entries for the General Fund and government21 activities at the
Transcribed Image Text:amounts to the nearest dollar.) 4-5 Adjusting Entries for Inventory of Supplies. The Village of Baxter uses the purchases method of accounting for its inventories of supplies in the General Fund. GASB standards, however, require that the consumption method be used for the government-wide financial statements. Because its computer system is very limited, the Village uses a periodic inventory system, adjusting inventory balances based on a physical inventory of supplies at year-end. When supplies are received during the year, the Village records expenditures and expenses in the general journals of the General Fund and governmental activities, respee- tively. The Village's inventory records showed the following information for the fiscal year ending December 31, 2011: Balance of inventory, December 31, 2010 Purchases of inventory during 2011 Balance of inventory, December 31, 2011 $140,000 720,000 155,000 Required a. Provide the required adjusting entries at the end of 2011, assuming that the December 31, 2011, balance of Inventory of Supplies has been confirmed by physical count. Make entries in the general journals of both the General Fund (omitting subsidiary detail) and governmental activities at the government- wide level. b. Assume that the General Fund uses the consumption method for reporting inventories of supplies rather than the purchases method. Make the required adjusting entries for the General Fund and government21 activities at the
Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Fund accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education