Question

During the fiscal year 2017, the City of Hickory Hills issued purchase orders to various vendors in the amounts shown for the following functions of the city:

General Government $ 164,200
Public Safety 302,000
Public Works 224,400
Culture and Recreation 181,700
Health and Welfare 168,100
Miscellaneous 24,600
Total $ 1,065,000

All goods ordered during the year were received at the following actual costs:

General Government $ 159,800
Public Safety 301,700
Public Works 226,800
Culture and Recreation 181,700
Health and Welfare 171,300
Miscellaneous 25,600
Total $ 1,066,900

Prepare journal entries in the General Fund general journal to record the issuance of purchase orders and to record the receipt of and payment for goods during the year. Also show subsidiary detail for the Encumbrances and Expenditures ledgers.

Answer 1

a. Record the issuance of purchase orders.

General Journal Debit Credit

General Fund:Encumbrances 2017 1,065,000

Encumbrances Outstanding 2017 1,065,000

b. Record the receipt of goods.

General Journal Debit Credit

Encumbrances Outstanding 2017 1,065,000

Encumbrances 2017 1,065,000

b 2. Record the expenditures.

General Journal Debit Credit

General Fund:

Expenditures 1,066,900

Vouchers payable 1,066,900

b 3.Record the payment for goods.

General Journal Debit Credit

Cash 1,066,900

Expenses-General Fund 1,066,900