A city orders a new computer for its General Fund at an anticipated cost of $94,

Question

A city orders a new computer for its General Fund at an anticipated cost of $94,500. Its actual cost when received is $96,440. Payment is subsequently made.

Prepare all required journal entries for both fund and government-wide financial statements. (Select the appropriate fund for each situation when required. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Answer is complete but not entirely correct. 1. Receved in the computers and the accompanying labillity Government Actvites Record the recelpt of computers and the lablity 96.440 Fund balance reserve for encumbrances 96440 Record payment mace Vouchers payable Caah | 96.440 96440 2. Receved in the payment made for computers. Record payment made tr computers vouchers payable Cash General Fund 96,440 96440 Record entry to remove encumbrance for Fund balance reserve for encumbrances ahas now been receved 94,500 94500 Record the recelpt of computers and the 96.440 Vouchers payable 96440 Record payment made vouchers payable Caah 96440 96440

Explanation / Answer

Answer

1.

Government-wide financial statements

Government activities:

as a result of the purchase and payment, capital assets have gone up by the cost of the computer and cash has been reduced by the same amount.

2.

Fund financial statements
General fund:

on the statement of revenues, expenditures, and other changes in fund balance, an expenditure of $96,440 will be shown. Cash will also decrease by that amount

Date Particulars Dr Cr Computer $96440 Vouchers payable $96440 Vouchers payable $96440 Cash $96440

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