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Appropriations, Encumbrances, and Expenditures. The finance director of the Town of Liberty has asked you to determine whether the appropriations, expenditures, and encumbrances comparison for Office...

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Appropriations, Encumbrances, and Expenditures. The finance director of the Town of Liberty has asked you to determine whether the appropriations, expenditures, and encumbrances comparison for Office Supplies for a certain year (reproduced as follows) presents the information correctly. You determine that the General Fund chart of accounts describes office supplies as “tangible items of relatively short life to be used in a business office.” You also determine that the transfer of stationery, at cost, to the town water utility was properly authorized; the Water Utility Fund is to pay the General Fund $330 for the supplies. The transfer of $46,000 from Office Supplies to Personal Services was made by an accounting clerk, without the knowledge of managers, to avoid reporting that the Personal Services appropriation had been over expended.

Required

To determine whether the following budgetary comparison is correct, you need to compute each of the following. Organize and label your computations so the finance director can understand them.

a. The final amended amount of the appropriation for Office Supplies for the year.

b. The valid amount of encumbrances outstanding against this appropriation at the end of the year.

c. The net amount of expenditures made during the year that were properly chargeable to this appropriation.

d. The unencumbered unexpended balance of this appropriation.

TOWN OF LIBERTY General Fund
Appropriation, Expenditures, and Encumbrances

     

Encumbrances

   

Purchase No.

Explanation

Appropriations

Debits

Credits

Expenditures

Available Balance

 

Budget legally approved

62,200

     

62,200

350

Purchase order—computer paper

 

600

   

61,600

356

Purchase order—stationery

   

420

 

62,020

 

Refund of prior year expenditure

30

     

62,050

370

Purchase order—filing supplies

 

400

   

61,650

350

Invoice

   

605

605

61,045

378

Purchase order—computer

 

3,160

   

57,885

380

Contract for washing office windows

 

2,000

   

55,885

356

Invoice

   

420

420

55,885

 

Cost of stationery issued to

         
 

town’s water utility

330

     

56,215

 

Refund on P.O. 350

10

     

56,225

370

Invoice

   

400

425

55,800

380

Invoice

     

2,000

53,000

385

Purchase order—furniture

 

7000

   

46,000

 

Transfer to Personal Services

         
 

appropriation

(46,000)

     

0

Answered Same Day Dec 24, 2021

Solution

Robert answered on Dec 24 2021
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