P4-43. (Encumbrance and expenditure accounting)The city council made an appropriation to the police department of $95,000 for the purchase of suppliesand equipment. The following transactions and events occurred regarding this appropriation. Preparean appropriations ledger like Table 4-2 using columns for Appropriations, Encumbrances (Dr. and Cr.),Expenditures, and Available Appropriations. Then, prepare journal entries to record the transactionsand events. Post the appropriation amount and the jourmal entries to the appropriations ledger. Chargeall expenditures to Supplies and equipment. Make sure your final posting shows the remaining amountavailable for spending.1. The department placed purchase order (PO) 1 for 5 motorcycles, estimated to cost $10,000 each.2. The department placed PO 2 for crime prevention supplies at an estimated cost of $30,000.3. The motorcycles ordered in PO 1 arrived in good condition. The invoice of $50,000 was approvedfor payment.4. PO 3 was placed for radio equipment at an estimated cost of $10,000.5. The supplies ordered in PO 2 arrived, along with an invoice for $32,000. The invoice was approvedfor payment.6. The department obtained a check from the finance director for $250, made out to a local supplier, topurchase a new firearm for $250 on an emergency basis; no purchase order had been placed.

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Answered: Expenditures, and Available…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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