This problem is based on the information about the Murphy County General Fund budgeted and actual transactions and events described in Problem 4-2.

Required

1. Prepare a budgetary comparison statement for the General Fund of Murphy County for the 20X8 fiscal year. The statement should present revenues (by source category), expenditures and encumbrances (by function), and the excess of revenues over (under) expenditures and encumbrances. Use these column headings:
Original Budget
Revised Budget
Actual
Variance—Favorable (Unfavorable)

Assume that no encumbrances were outstanding at the beginning of $20X8$.

2. Because encumbrances do not constitute expenditures, some governmental fund budgetary comparison statements omit data on encumbrances. (a) If no encumbrances were outstanding at the beginning of $20X8$, what effects would omission of encumbrances data have on the Murphy County General Fund budgetary comparison statement for the 20X8 fiscal year? (b) In what circumstances would including or excluding encumbrances data mislead users of a governmental fund budgetary comparison statement?