Chapter 3, Problem 21EP

On February 15, the Town of Evergreen police chief’s administrative assistant is preparing a purchase order to place an order for a new computer. The computer is estimated to cost $1,600. Prior to submitting the purchase order, he is required to verify that an appropriation is available in a sufficient amount to cover the cost of the new computer. His computer display shows the following current information for the Police Chief Equipment account and Office Supplies account.

Required

Review the police chief accounts as of February 15, and answer the following questions, assuming you are the administrative assistant.

1. a.      Is the available appropriation balance sufficient to authorize placing the purchase order for the new computer?
2. b.      You notice an available appropriation balance in the office supply account. Under what circumstances might the office supplies appropriation balance be used for the equipment purchase?