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trepare the journal entries for 2020 relating to these events, using the a. Legal budgetary basis. Description Expenditures-prior year encumbrances Debit 395,000 x Credit Accounts payable 60,000 x To record invoices for goods and services ordered in 2019. Fund balance-assigned 2,500,000 v Fund balance-unassigned 2,100,000 x Expenditures-prior year encumbrances 2.100,000 x To close encumbrances carried over from 2019 and related expenditures. b. GAAP budgetary basis.

trepare the journal entries for 2020 relating to these events, using the a. Legal budgetary basis. Description Expenditures-prior year encumbrances Debit 395,000 x Credit Accounts payable 60,000 x To record invoices for goods and services ordered in 2019. Fund balance-assigned 2,500,000 v Fund balance-unassigned 2,100,000 x Expenditures-prior year encumbrances 2.100,000 x To close encumbrances carried over from 2019 and related expenditures. b. GAAP budgetary basis.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Carryover Encumbrances The December 31, 2019 balance sheet for the general fund of the City of Melville showed an assigned fund balance of $2,500,000 for outstanding encumbrances. This figure represented $2,100,000 encumbered for office equipment and $400,000 for supplies. Early in 2020, the equipment and supplies were delivered and bills received for $2,095,000 and $402,000, respectively. Required Prepare the journal entries for 2020 relating to these events, using the a. Legal budgetary basis. Description Debit Credit Expenditures-prior year encumbrances Accounts payable 395,000 x 60,000 x To record invoices for goods and services ordered in 2019. Fund balance-assigned 2,500,000 v Fund balance-unassigned 2,100,000 x Expenditures-prior year encumbrances 2.100.000 x To close encumbrances carried over from 2019 and related expenditures. b. GAAP budgetary basis. Description Debit Credit Encumbrances 2,500,000 v Fund balance-unassigned 2,500.000 v To restore encumbrances carried over from 2019. Fund balance-assigned 2,500,000 v Encumbrances 2,500,000 v To reverse encumbrances for goods and services received. 0 x Expenditures Accounts payable To record invoices for goods and services.
Transcribed Image Text:Carryover Encumbrances The December 31, 2019 balance sheet for the general fund of the City of Melville showed an assigned fund balance of $2,500,000 for outstanding encumbrances. This figure represented $2,100,000 encumbered for office equipment and $400,000 for supplies. Early in 2020, the equipment and supplies were delivered and bills received for $2,095,000 and $402,000, respectively. Required Prepare the journal entries for 2020 relating to these events, using the a. Legal budgetary basis. Description Debit Credit Expenditures-prior year encumbrances Accounts payable 395,000 x 60,000 x To record invoices for goods and services ordered in 2019. Fund balance-assigned 2,500,000 v Fund balance-unassigned 2,100,000 x Expenditures-prior year encumbrances 2.100.000 x To close encumbrances carried over from 2019 and related expenditures. b. GAAP budgetary basis. Description Debit Credit Encumbrances 2,500,000 v Fund balance-unassigned 2,500.000 v To restore encumbrances carried over from 2019. Fund balance-assigned 2,500,000 v Encumbrances 2,500,000 v To reverse encumbrances for goods and services received. 0 x Expenditures Accounts payable To record invoices for goods and services.
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