Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method. The necessary entries assuming G town uses consumption method of accounting for inventories.

Question

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Answer 1

Question

Chapter 17, Problem 17.6E

a

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The necessary entries assuming G town uses consumption method of accounting for inventories.

a

Expert Solution

Explanation of Solution

Consumption method

Date	Particulars	Debit $	Credit $
	1. Entry for purchase of supplies
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Acquired inventory of supplies)

	2. Entry on September 30
9/30/20X2	Inventory of supplies	2,800
	Expenditures		2,800
	(Ending inventory recognized)

	Closing entry for Inventory of supplies
	Fund balance − Unreserved	2,800
	Fund balance − Reserved for inventories		2,800
	(Establish fund reserve for ending inventory)

	Fund balance − Unreserved	800
	Expenditures		800
	(Closing expenditures account)

9/30/20X3	3. Entry when supplies used during the year
	Expenditures	2,800
	Inventory of supplies		2,800
	(Expenditure for inventory consumed during the year recognized)

	Fund balance − reserved for inventories	2,800
	Fund balance − Unreserved		2,800
	(Fund balance reserved for inventory removed)

	Fund balance − unreserved	2,800
	Expenditures		2,800
	(Expenditure account closed)

Purchase of inventory recognized

Closing entries required on September 30, 20X2

Unused inventory recognized
Unused inventory value transferred to fund balance unreserved account
Expenditure account closed by crediting expenditure account

Entries when supplies used

Purchase of inventory recognized
Fund balance reserved for inventory removed
Expenditure account closed and transferred to fund balance unreserved account

b

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The entries assuming purchase method of accounting for inventory

b

Expert Solution

Explanation of Solution

Date	Particulars	Debit $	Credit $
	1. Purchase of supply
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Inventory of supplies acquire)
	2. Entries at the end of 20X2
9/30/20X2	Inventory of supplies	2,800
	Fund balance − reserved for inventory		2,800
	(Ending inventory of supplies recognized)

	Fund balance − Unreserved	3,600
	Expenditure		3,600
	(Expenditure account closed for the year)

	3. Entry at the end of 20X3
9/30/20X3	Fund balance − Reserved for inventories	2,800
	Inventory of supplies		2,800
	(Removal of fund balance reserved for inventories consumed)

Under the purchase method the entire purchase of supply is recorded by debiting the expenditure account and crediting the voucher payable account
At the end of the year unused inventory of supply transferred to the fund balance reserved for the inventory account
Expenditure account closed by crediting expenditure account and debit Fund balance unreserved
In 20X3 fund balance reserved for inventory is reversed.

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Students have asked these similar questions

ces Georgetown purchased supplies on August 8, 20X2, for $4,400. At the fiscal year-end on September 30, the inventory of suppiles was $3,150. Required: a. Assume that Georgetown uses the consumption method of accounting for inventories. (If no entry is required for a transaction/event, select "No Journal entry required in the first account field.) (1) Prepare the entry for the purchase on August 8, 20X2 (2) Prepare the entries required on September 30, 20X2, including the closing of the Expenditures account. (3) Assuming the supplies were used during 20X3, prepare the entries on September 30, 20X3. View transaction list Journal entry worksheet

The Marigold Equipment Corporation maintains a general ledger account for each class of inventory, debiting the individual accounts for increases during the period and crediting them for decreases. The transactions that follow are for the Raw Materials inventory account, which is debited for materials purchased and credited for materials requisitioned for use. 1. An invoice for $8,700, terms f.o.b. destination, was received and entered on January 2, 2021. The receiving report shows that the materials were received on December 28, 2020. Materials costing $8,000 were returned to the supplier on December 29, 2020, on f.o.b. shipping point terms. The returns were entered into Marigold's general ledger on December 28, even though the returned items did not arrive at the vendor's office until January 6, 2021. 2. Materials costing $28,700, shipped f.o.b. destination, were not entered by December 31, 2020, because they were in a railroad car on the company's siding on that date and had not…

Coronado Machine Company maintains a general ledger account for each class of inventory, debiting such accounts for increases during the period and crediting them for decreases. The transactions below relate to the Raw Materials inventory account, which is debited for materials purchased and credited for materials requisitioned for use. 1. An invoice for $12,960, terms f.o.b. destination, was received and entered January 2, 2020. The receiving report shows that the materials were received December 28, 2019. 2. Materials costing $44,800, shipped f.o.b. destination, were not entered by December 31, 2019, “because they were in a railroad car on the company’s siding on that date and had not been unloaded.” 3. Materials costing $11,680 were returned to the supplier on December 29, 2019, and were shipped f.o.b. shipping point. The return was entered on that date, even though the materials are not expected to reach the supplier’s place of business until January 6, 2020. 4. An invoice for…

Answer 2

Question

Chapter 17, Problem 17.6E

a

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The necessary entries assuming G town uses consumption method of accounting for inventories.

a

Expert Solution

Explanation of Solution

Consumption method

Date	Particulars	Debit $	Credit $
	1. Entry for purchase of supplies
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Acquired inventory of supplies)

	2. Entry on September 30
9/30/20X2	Inventory of supplies	2,800
	Expenditures		2,800
	(Ending inventory recognized)

	Closing entry for Inventory of supplies
	Fund balance − Unreserved	2,800
	Fund balance − Reserved for inventories		2,800
	(Establish fund reserve for ending inventory)

	Fund balance − Unreserved	800
	Expenditures		800
	(Closing expenditures account)

9/30/20X3	3. Entry when supplies used during the year
	Expenditures	2,800
	Inventory of supplies		2,800
	(Expenditure for inventory consumed during the year recognized)

	Fund balance − reserved for inventories	2,800
	Fund balance − Unreserved		2,800
	(Fund balance reserved for inventory removed)

	Fund balance − unreserved	2,800
	Expenditures		2,800
	(Expenditure account closed)

Purchase of inventory recognized

Closing entries required on September 30, 20X2

Unused inventory recognized
Unused inventory value transferred to fund balance unreserved account
Expenditure account closed by crediting expenditure account

Entries when supplies used

Purchase of inventory recognized
Fund balance reserved for inventory removed
Expenditure account closed and transferred to fund balance unreserved account

b

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The entries assuming purchase method of accounting for inventory

b

Expert Solution

Explanation of Solution

Date	Particulars	Debit $	Credit $
	1. Purchase of supply
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Inventory of supplies acquire)
	2. Entries at the end of 20X2
9/30/20X2	Inventory of supplies	2,800
	Fund balance − reserved for inventory		2,800
	(Ending inventory of supplies recognized)

	Fund balance − Unreserved	3,600
	Expenditure		3,600
	(Expenditure account closed for the year)

	3. Entry at the end of 20X3
9/30/20X3	Fund balance − Reserved for inventories	2,800
	Inventory of supplies		2,800
	(Removal of fund balance reserved for inventories consumed)

Under the purchase method the entire purchase of supply is recorded by debiting the expenditure account and crediting the voucher payable account
At the end of the year unused inventory of supply transferred to the fund balance reserved for the inventory account
Expenditure account closed by crediting expenditure account and debit Fund balance unreserved
In 20X3 fund balance reserved for inventory is reversed.

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Answer 3

Question

Chapter 17, Problem 17.6E

a

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The necessary entries assuming G town uses consumption method of accounting for inventories.

a

Expert Solution

Explanation of Solution

Consumption method

Date	Particulars	Debit $	Credit $
	1. Entry for purchase of supplies
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Acquired inventory of supplies)

	2. Entry on September 30
9/30/20X2	Inventory of supplies	2,800
	Expenditures		2,800
	(Ending inventory recognized)

	Closing entry for Inventory of supplies
	Fund balance − Unreserved	2,800
	Fund balance − Reserved for inventories		2,800
	(Establish fund reserve for ending inventory)

	Fund balance − Unreserved	800
	Expenditures		800
	(Closing expenditures account)

9/30/20X3	3. Entry when supplies used during the year
	Expenditures	2,800
	Inventory of supplies		2,800
	(Expenditure for inventory consumed during the year recognized)

	Fund balance − reserved for inventories	2,800
	Fund balance − Unreserved		2,800
	(Fund balance reserved for inventory removed)

	Fund balance − unreserved	2,800
	Expenditures		2,800
	(Expenditure account closed)

Purchase of inventory recognized

Closing entries required on September 30, 20X2

Unused inventory recognized
Unused inventory value transferred to fund balance unreserved account
Expenditure account closed by crediting expenditure account

Entries when supplies used

Purchase of inventory recognized
Fund balance reserved for inventory removed
Expenditure account closed and transferred to fund balance unreserved account

b

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The entries assuming purchase method of accounting for inventory

b

Expert Solution

Explanation of Solution

Date	Particulars	Debit $	Credit $
	1. Purchase of supply
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Inventory of supplies acquire)
	2. Entries at the end of 20X2
9/30/20X2	Inventory of supplies	2,800
	Fund balance − reserved for inventory		2,800
	(Ending inventory of supplies recognized)

	Fund balance − Unreserved	3,600
	Expenditure		3,600
	(Expenditure account closed for the year)

	3. Entry at the end of 20X3
9/30/20X3	Fund balance − Reserved for inventories	2,800
	Inventory of supplies		2,800
	(Removal of fund balance reserved for inventories consumed)

Under the purchase method the entire purchase of supply is recorded by debiting the expenditure account and crediting the voucher payable account
At the end of the year unused inventory of supply transferred to the fund balance reserved for the inventory account
Expenditure account closed by crediting expenditure account and debit Fund balance unreserved
In 20X3 fund balance reserved for inventory is reversed.

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Answer 4

Question

Chapter 17, Problem 17.6E

a

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The necessary entries assuming G town uses consumption method of accounting for inventories.

a

Expert Solution

Explanation of Solution

Consumption method

Date	Particulars	Debit $	Credit $
	1. Entry for purchase of supplies
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Acquired inventory of supplies)

	2. Entry on September 30
9/30/20X2	Inventory of supplies	2,800
	Expenditures		2,800
	(Ending inventory recognized)

	Closing entry for Inventory of supplies
	Fund balance − Unreserved	2,800
	Fund balance − Reserved for inventories		2,800
	(Establish fund reserve for ending inventory)

	Fund balance − Unreserved	800
	Expenditures		800
	(Closing expenditures account)

9/30/20X3	3. Entry when supplies used during the year
	Expenditures	2,800
	Inventory of supplies		2,800
	(Expenditure for inventory consumed during the year recognized)

	Fund balance − reserved for inventories	2,800
	Fund balance − Unreserved		2,800
	(Fund balance reserved for inventory removed)

	Fund balance − unreserved	2,800
	Expenditures		2,800
	(Expenditure account closed)

Purchase of inventory recognized

Closing entries required on September 30, 20X2

Unused inventory recognized
Unused inventory value transferred to fund balance unreserved account
Expenditure account closed by crediting expenditure account

Entries when supplies used

Purchase of inventory recognized
Fund balance reserved for inventory removed
Expenditure account closed and transferred to fund balance unreserved account

b

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The entries assuming purchase method of accounting for inventory

b

Expert Solution

Explanation of Solution

Date	Particulars	Debit $	Credit $
	1. Purchase of supply
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Inventory of supplies acquire)
	2. Entries at the end of 20X2
9/30/20X2	Inventory of supplies	2,800
	Fund balance − reserved for inventory		2,800
	(Ending inventory of supplies recognized)

	Fund balance − Unreserved	3,600
	Expenditure		3,600
	(Expenditure account closed for the year)

	3. Entry at the end of 20X3
9/30/20X3	Fund balance − Reserved for inventories	2,800
	Inventory of supplies		2,800
	(Removal of fund balance reserved for inventories consumed)

Under the purchase method the entire purchase of supply is recorded by debiting the expenditure account and crediting the voucher payable account
At the end of the year unused inventory of supply transferred to the fund balance reserved for the inventory account
Expenditure account closed by crediting expenditure account and debit Fund balance unreserved
In 20X3 fund balance reserved for inventory is reversed.

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Answer 5

Chapter 17, Problem 17.6E

a

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The necessary entries assuming G town uses consumption method of accounting for inventories.

a

Expert Solution

Explanation of Solution

Consumption method

Date	Particulars	Debit $	Credit $
	1. Entry for purchase of supplies
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Acquired inventory of supplies)

	2. Entry on September 30
9/30/20X2	Inventory of supplies	2,800
	Expenditures		2,800
	(Ending inventory recognized)

	Closing entry for Inventory of supplies
	Fund balance − Unreserved	2,800
	Fund balance − Reserved for inventories		2,800
	(Establish fund reserve for ending inventory)

	Fund balance − Unreserved	800
	Expenditures		800
	(Closing expenditures account)

9/30/20X3	3. Entry when supplies used during the year
	Expenditures	2,800
	Inventory of supplies		2,800
	(Expenditure for inventory consumed during the year recognized)

	Fund balance − reserved for inventories	2,800
	Fund balance − Unreserved		2,800
	(Fund balance reserved for inventory removed)

	Fund balance − unreserved	2,800
	Expenditures		2,800
	(Expenditure account closed)

Purchase of inventory recognized

Closing entries required on September 30, 20X2

Unused inventory recognized
Unused inventory value transferred to fund balance unreserved account
Expenditure account closed by crediting expenditure account

Entries when supplies used

Purchase of inventory recognized
Fund balance reserved for inventory removed
Expenditure account closed and transferred to fund balance unreserved account

b

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The entries assuming purchase method of accounting for inventory

b

Expert Solution

Explanation of Solution

Date	Particulars	Debit $	Credit $
	1. Purchase of supply
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Inventory of supplies acquire)
	2. Entries at the end of 20X2
9/30/20X2	Inventory of supplies	2,800
	Fund balance − reserved for inventory		2,800
	(Ending inventory of supplies recognized)

	Fund balance − Unreserved	3,600
	Expenditure		3,600
	(Expenditure account closed for the year)

	3. Entry at the end of 20X3
9/30/20X3	Fund balance − Reserved for inventories	2,800
	Inventory of supplies		2,800
	(Removal of fund balance reserved for inventories consumed)

Under the purchase method the entire purchase of supply is recorded by debiting the expenditure account and crediting the voucher payable account
At the end of the year unused inventory of supply transferred to the fund balance reserved for the inventory account
Expenditure account closed by crediting expenditure account and debit Fund balance unreserved
In 20X3 fund balance reserved for inventory is reversed.

Answer 6

Chapter 17, Problem 17.6E

a

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The necessary entries assuming G town uses consumption method of accounting for inventories.

a

Expert Solution

Explanation of Solution

Consumption method

Date	Particulars	Debit $	Credit $
	1. Entry for purchase of supplies
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Acquired inventory of supplies)

	2. Entry on September 30
9/30/20X2	Inventory of supplies	2,800
	Expenditures		2,800
	(Ending inventory recognized)

	Closing entry for Inventory of supplies
	Fund balance − Unreserved	2,800
	Fund balance − Reserved for inventories		2,800
	(Establish fund reserve for ending inventory)

	Fund balance − Unreserved	800
	Expenditures		800
	(Closing expenditures account)

9/30/20X3	3. Entry when supplies used during the year
	Expenditures	2,800
	Inventory of supplies		2,800
	(Expenditure for inventory consumed during the year recognized)

	Fund balance − reserved for inventories	2,800
	Fund balance − Unreserved		2,800
	(Fund balance reserved for inventory removed)

	Fund balance − unreserved	2,800
	Expenditures		2,800
	(Expenditure account closed)

Purchase of inventory recognized

Closing entries required on September 30, 20X2

Unused inventory recognized
Unused inventory value transferred to fund balance unreserved account
Expenditure account closed by crediting expenditure account

Entries when supplies used

Purchase of inventory recognized
Fund balance reserved for inventory removed
Expenditure account closed and transferred to fund balance unreserved account

Answer 7

Chapter 17, Problem 17.6E

a

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The necessary entries assuming G town uses consumption method of accounting for inventories.

Answer 8

a

Expert Solution

Explanation of Solution

Consumption method

Date	Particulars	Debit $	Credit $
	1. Entry for purchase of supplies
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Acquired inventory of supplies)

	2. Entry on September 30
9/30/20X2	Inventory of supplies	2,800
	Expenditures		2,800
	(Ending inventory recognized)

	Closing entry for Inventory of supplies
	Fund balance − Unreserved	2,800
	Fund balance − Reserved for inventories		2,800
	(Establish fund reserve for ending inventory)

	Fund balance − Unreserved	800
	Expenditures		800
	(Closing expenditures account)

9/30/20X3	3. Entry when supplies used during the year
	Expenditures	2,800
	Inventory of supplies		2,800
	(Expenditure for inventory consumed during the year recognized)

	Fund balance − reserved for inventories	2,800
	Fund balance − Unreserved		2,800
	(Fund balance reserved for inventory removed)

	Fund balance − unreserved	2,800
	Expenditures		2,800
	(Expenditure account closed)

Purchase of inventory recognized

Closing entries required on September 30, 20X2

Unused inventory recognized
Unused inventory value transferred to fund balance unreserved account
Expenditure account closed by crediting expenditure account

Entries when supplies used

Purchase of inventory recognized
Fund balance reserved for inventory removed
Expenditure account closed and transferred to fund balance unreserved account

Answer 9

a

Expert Solution

Answer 10

a

Expert Solution

Answer 11

Expert Solution

Answer 12

b

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The entries assuming purchase method of accounting for inventory

b

Expert Solution

Explanation of Solution

Date	Particulars	Debit $	Credit $
	1. Purchase of supply
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Inventory of supplies acquire)
	2. Entries at the end of 20X2
9/30/20X2	Inventory of supplies	2,800
	Fund balance − reserved for inventory		2,800
	(Ending inventory of supplies recognized)

	Fund balance − Unreserved	3,600
	Expenditure		3,600
	(Expenditure account closed for the year)

	3. Entry at the end of 20X3
9/30/20X3	Fund balance − Reserved for inventories	2,800
	Inventory of supplies		2,800
	(Removal of fund balance reserved for inventories consumed)

Under the purchase method the entire purchase of supply is recorded by debiting the expenditure account and crediting the voucher payable account
At the end of the year unused inventory of supply transferred to the fund balance reserved for the inventory account
Expenditure account closed by crediting expenditure account and debit Fund balance unreserved
In 20X3 fund balance reserved for inventory is reversed.

Answer 13

b

To determine

Concept introduction:

Expenditures for inventory: Governmental units usually maintain a small amount of inventory in office supplies. They are two methods using which expenditures of inventory accounted for. The purchase method recognizes entire expenditure for inventory in the period when supplies are acquired. Only the amount of inventory consumed will be recognized in the case of the consumption method.

The entries assuming purchase method of accounting for inventory

Answer 14

b

Expert Solution

Explanation of Solution

Date	Particulars	Debit $	Credit $
	1. Purchase of supply
8/8/20X2	Expenditures	3,600
	Vouchers payable		3,600
	(Inventory of supplies acquire)
	2. Entries at the end of 20X2
9/30/20X2	Inventory of supplies	2,800
	Fund balance − reserved for inventory		2,800
	(Ending inventory of supplies recognized)

	Fund balance − Unreserved	3,600
	Expenditure		3,600
	(Expenditure account closed for the year)

	3. Entry at the end of 20X3
9/30/20X3	Fund balance − Reserved for inventories	2,800
	Inventory of supplies		2,800
	(Removal of fund balance reserved for inventories consumed)

Under the purchase method the entire purchase of supply is recorded by debiting the expenditure account and crediting the voucher payable account
At the end of the year unused inventory of supply transferred to the fund balance reserved for the inventory account
Expenditure account closed by crediting expenditure account and debit Fund balance unreserved
In 20X3 fund balance reserved for inventory is reversed.