A physical count of consumable supplies at year-end showed an ending balance of $66,000, an increase of $6,000 during the year. The city uses the purchases method of accounting for its inventory in the General Fund and the consumption method at the government-wide level. Since the city uses a periodic inventory system, both at the fund and governmental levels, it records all purchases of inventory as expenditures in the General Fund and as expenses at the government-wide level. These were included as part of the amounts recorded in paragraph 4-a-7. Adjustments to the expenses accounts should be made to the Public Works function, where most supplies are used.
Required:
Prepare the adjusting journal entries in the General Fund journal to adjust the Inventory of Supplies and Fund Balance-Non-spendable-Inventory of Supplies accounts to the correct balances and the governmental activities journal to adjust the Expenses-Public Works and Inventory of Supplies accounts.
Post all journal entries to the general and subsidiary ledgers:
After reviewing all entries for accuracy, including year and paragraph numbers, post all entries to the general ledger accounts and to all subsidiary ledger accounts, by clicking on [Post Entries]. Also post all entries in the governmental activities journal.