Reference no: EM131826914
Problem - A government with a beginning inventory of materials and supplies of $100,000 in its General Fund had the following transactions during the year.
1. Ordered materials and supplies with an estimated cost of $3,150,000.
2. Received materials and supplies with an actual invoice cost of $2,920,000. No payment was made upon receipt; $2,950,000 was the encumbered amount.
3. Paid $2,300,000 on account for materials and supplies received in #2.
4. The ending physical inventory of General Fund materials and supplies found materials and supplies of $150,000 on hand at year end.
A. Prepare the general journal entries required to account for the previous information and transactions assuming the government uses the consumption method of accounting for materials and supplies.
B. Prepare the general journal entries required to account for the previous information and transactions assuming the government uses the purchases method of accounting for materials and supplies.