The General Fund reported a beginning balance of inventory of materials and supplies of $122,000. The ending balance was $150,000. Supplies received during the year (purchases) totaled $600,000. The county uses the purchases method. The General Fund should report expenditures for materials and supplies for the year of a. $450,000. b. $572,000. c. $600,000. d. $628,000.

Question

June Wilson

Business

27 May, 05:05

The General Fund reported a beginning balance of inventory of materials and supplies of $122,000. The ending balance was $150,000. Supplies received during the year (purchases) totaled $600,000. The county uses the purchases method. The General Fund should report expenditures for materials and supplies for the year of a. $450,000. b. $572,000. c. $600,000. d. $628,000.

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Answers (1)

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Larry Morales · Answer 1

c. $600,000

Explanation:

Under the purchase methods of accounting, a business records assets at the fair market value. It is the price that the business paid to acquire the assets.

For the general fund, the cost incurred in acquiring the purchases is $600,000. This is the figure that will be recorded and reported in books. The purchase method is contrasted with the consumption method.