A county uses the consumption method to account for General Fund materials and s

Question

A county uses the consumption method to account for General Fund materials and supplies.  The beginning inventory of materials and supplies was $122,000.  The ending inventory was $150,000.  The beginning balance of reserve for encumbrances (for supplies ordered but not received at the beginning of the year) was $50,000; the ending balance was $20,000.  Supplies purchased during the year totaled $750,000.  The county General Fund should report expenditures for materials and supplies for the year of

$722,000

$750,000

$752,000

$780,000

$722,000

$750,000

$752,000

$780,000

Explanation / Answer

The county General Fund should report expenditures for materials and supplies for the year of $752,000 i.e. option (c) Particulars Amount Supplies purchased during the year        750,000 Add : Beginning Inventory        122,000 Less : Ending Inventory        150,000 Add : Beginning reserve          50,000 Less : Ending reserve          20,000 Expenditures for materials and supplies        752,000

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