Chapter 6, Problem 2P

(Capital Outlay; Inventory–Purchases Method) (a) Record the following transactions in the General Fund General Ledger of a school district that uses the purchases method to account for materials, supplies, and prepayments. Record both the budgetary and actual entries. Assume that materials and supplies costing $37,000 were on hand at the beginning of the year. (b) What amount of nonspendable fund balance should be reported at year end?

1. The school district ordered the following:

2. The school received one of the buses at an actual cost of $120,000, which equaled the estimated amount.

3. The school received most of the supplies ordered (estimated cost, $95,000). The actual cost was $95,800.

4. The school paid $93,000 of the vouchers payable for the supplies.

5. At year end, the school had supplies on hand costing $22,000.