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Prepare the necessary entries for the current fiscal year

2. Assume that the County of Katerah maintains its books and records in a manner that facilitates preparation of the fund financial statements. The County formally integrates the budget into the accounting system and uses the encumbrance system. All appropriations lapse at year-end. At the beginning of the fiscal year, the County had the following balances in its accounts. All amounts are in thousands.

REQUIRED: Prepare the necessary entries for the current fiscal year.

Cash $200
Fund Balance-Unreserved 50
Reserve for Encumbrances 150

a. The County made the appropriate entry to restore the prior year purchase commitments.

b. The County Board approved a budget with revenues estimated to be $800 and expenditures of $750.

c. The County received the items that had been ordered in the prior year at an actual cost of $135.

d. The County ordered supplies at an estimated cost of $50 and equipment at an estimated cost of $70.

e. The County incurred salaries and other operating expenses during the year totaling $600. The County paid these items in cash.

f. The County received the equipment at an actual cost of $75.

g. The County earned and collected, in cash, revenues of $810.

Solution Preview

a. The County made the appropriate entry to restore the prior year purchase commitments.
Debit: Encumbrances $150
Credit: Reserved for Encumbrances $150

b. The County Board approved a budget with revenues estimated to be $800 and expenditures of $750.
Debit: Estimated Revenues $800
Credit: ...

Solution Summary

The expert prepares the necessary entries for the current fiscal year.

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