Appropriations, Encumbrances, and Expenditures The finance director of the Town of Liberty has asked you to determine whether the appropriations, expenditures, and encumbrances comparison for Office Supplies for a certain year (reproduced as follows) presents the information correctly. You determine that the General Fund chart of accounts describes office supplies as €œtangible items of relatively short life to be used in a business office.€ You also determine that the transfer of stationery, at cost, to the town water utility was properly authorized; the Water Utility Fund is to pay the General Fund $330 for the supplies. The transfer of $46,000 from Office Supplies to Personal Services was made by an accounting clerk, without the knowledge of managers, to avoid reporting that the Personal Services appropriation had been overextended.
Required
To determine whether the following budgetary comparison is correct, you need to compute each of the following. Organize and label your computations so the finance director can understand them.
a. The final amended amount of the appropriation for Office Supplies for the year.
b. The valid amount of encumbrances outstanding against this appropriation at the end of the year.
c. The net amount of expenditures made during the year that were properly chargeable to this appropriation.
d. The unencumbered unexpended balance of thisappropriation.

Transcribed Image Text:

TOWN OF LIBERTY General Fund Appropriation, Expenditures, and Encumbrances Encumbrances Debits Available Balance Expenditures Purchase No. Explanation Credits Appropriations Budget legally approved Purchase order-computer paper Purchase order-stationery Refund of prior year expenditure Purchase order-filing supplies 62,200 61,600 62,020 62,200 350 600 356 420 30 62,050 370 400 61,650 61,045 350 Invoice 605 605 Purchase order-computer Contract for washing office windows 3,160 378 57,885 380 2,000 55,885 356 Invoice 420 420 55,885 Cost of stationery issued to town's water utility 330 56,215 Refund on P.O. 350 10 56,225 370 Invoice 400 425 55,800 53,000 380 Invoice 2,000 Purchase order-furniture 385 7,000 46,000 Transfer to Personal Services appropriation (46,000)