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17 August, 15:57

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.

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  1. 17 August, 16:15
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    Solution:

    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
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