1) A government with a beginning inventory of supplies of $100 in its General Fu

Question

1) A government with a beginning inventory of supplies of $100 in its General Fund and had the following transactions during the year (all amounts are in thousands). Ordered supplies with an estimated cost of $3,150. 2. 1. Received supplies with an actual invoice cost of $2,920. No payment was made upon receipt; $2,950 was the encumbered amount. 3, Paid $2.300 on account for supplies received in #2. 4. During the year, the inventory warehouse issued $2,900 in supplies to general government departments. 5. The ending physical inventory of General Fund supplies found $150 on hand at year end. Reguired Uaing the Consumption method of accounting for inventory, prepare the general journal entries required to account for the previous information.

Explanation / Answer

1. Encumbrence A/c -------Dr 3,150

To Reserve for Encumbrence A/c 3,150

2.(a) Reserve for Encumbrence A/c ----Dr 3,150   

To Encumbrence A/c 3,150

2.(b) Expenditure A/c ------- Dr 2920

To Vouchers Payable A/c 2920

3. Voucher Payable A/c -------------Dr 2300

To Cash /Bank 2300

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