During fiscal year 2014, the City of Hickory Hills issued purchase orders to various vendors in the amounts shown for the following functions of the city:

General Government ....... $ 82,500

Public Safety ......... 148,700

Public Works ......... 130,400

Culture and Recreation ...... 97,300

Health and Welfare ........ 94,800

Miscellaneous .......... 14,200

Total ............ $567,900

All goods ordered during the year were received at the following actual costs:

General Government ....... $ 83,720

Public Safety .......... 147,940

Public Works ......... 131,140

Culture and Recreation ...... 98,780

Health and Welfare ........ 93,970

Miscellaneous ......... 14,300

Total ............ $569,850

Required

a. Prepare a summary journal entry in the General Fund general journal to record the issuance of purchase orders during fiscal year 2014. In addition, show subsidiary detail for the Encumbrances ledger.

b. Prepare summary journal entries in the General Fund general journal to record the receipt of and payment for goods during fiscal year 2014. In addition, show subsidiary detail for the Encumbrances and Expenditures ledgers.

c. Does the fact that the actual cost of goods received during the year exceeded the estimated cost when ordered suggest a budgetary or management problem?