Question

The City of Elmwood reported the following for the fiscal year ended Dec. 31, 2017:

Purchase orders authorized by appropriations
and outstanding as of December 31, 2017 $300,000
Expenditures authorized by 2017 appropriations $2,900,000
Expenditures authorized by 2016 appropriations $200,000
Unencumbered and unexpended balance of
2017 appropriations $500,000
Assume that appropriations do not lapse. What amount would be reported for Expenditures
(and Encumbrances, if appropriate) in the Statement of Revenues, Expenditures and Changes
in Fund Balances?
a. $2,900,000
b. $3,100,000
c. $3,200,000
d. $3,400.000

Answer 1

The amount reported for Expenditures in the Statement of Revenues, Expenditures and Changes in Fund Balances would be $3,100,000. There would be no amount reported for Encumbrances.

Step-by-step explanation:

In the Statement of Revenues, Expenditures and Changes in Fund Balances, the amount reported for Expenditures would be the sum of the expenditures authorized by 2017 appropriations and the expenditures authorized by 2016 appropriations. Therefore, the amount reported for Expenditures would be $2,900,000 + $200,000 = $3,100,000. Encumbrances, on the other hand, represent purchase orders authorized by appropriations and outstanding as of December 31, 2017. Since the question does not specifically mention encumbrances, we can assume that there are no outstanding purchase orders authorized by appropriations. Therefore, the amount reported for Encumbrances would be $0.