The Central Think Tank (CTT) receives a separate appropriation from Congress for

Question

The Central Think Tank (CTT) receives a separate appropriation from Congress for the acquisition of advanced intelligence-gathering materials. The following is a summary of transaction affecting the CTT's intelligence-gaterhing material appropiation for the year ended September 30, 2013. 1. The CTT received an appropriation of $400,000. 2. The OMB apportioned to the agency the entire amount that Congress appropriated. 3. To keep control over its rate of expenditures, the agency used an allotment system. During the year, the entire apportionment was allotted. 4. Commitments placed during the year for intelligence-gathering materials totaled $390,000. 5. Purchase orders issued against the commitments totaled $375,000. 6. Of the intelligence-gathering materials ordered, $360,000 worth was delivered this year; the remaining $15,000 worth will be delivered next year. The delivered materials were accepted and placed in inventory. 7. During the year, intelligence-gathering materials worth $140,000 were consumed in operations. 8. The CTT sent a disbursement schedule to the Treasury requesting payment of the invoice for $360,000 received from the vendor. 9. The Treasury later notified the CTT that the invoice had been paid. Prepare journal entries to record these transactions; state which entries are budgetary and which are proprietary. Also, prepare a statement of budgetary resources. Assume that all resources not obligated by year-end are not available for future obligation.

What are the journal entries for 6 - 9?

Explanation / Answer

For 6th point there would not be any entry as this is not a transaction, out of $375000 purchases, $360000 is to be delivered this year and the rest in next year.

This is just an additional information.

7. Consumtion of Raw materials Debit $140000

Inventory Credit $140000

8. Again, there would be no entry as this is no transaction, simply the assignment of payment approval to treasury and the entry of payment would be after treasury approves the amount and pay the said amount to supplier.

9. Accounts payable Debit $360000

Bank Credit $360000

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