During July, the first month of the fiscal year, the Town of Willingdon issued the following purchase orders and contracts (see Problem 3–22):
General government .......................................................$ 800,000
Public safety .........................................................................400,000
Public works ...........................................................................75,000
Health and welfare ................................................................65,000
Miscellaneous .........................................................................25,000
Total purchase orders and contracts ............................$1,365,000

Required
a. Show the general journal entry to record the issuance of the purchase orders and contracts. Show entries in subsidiary ledger accounts as well as general ledger accounts.
b. Explain why state and local governments generally record the estimated amounts of purchase orders and contracts in the accounts of budgeted governmental funds, whereas business entities generally do not prepare formal entries for purchase orders.

Data From Problem 22

The Town of Willingdon adopted the following General Fund budget for the fiscal year beginning July 1:

Estimated revenues:
Taxes .............................................................$15,000,000
Intergovernmental revenues .........................1,000,000
Licenses and permits .........................................400,000
Fines and forfeits ................................................150,000
Miscellaneous revenues ....................................100,000
Total estimated revenues ..........................$16,650,000
Appropriations:
General government ......................................$8,000,000
Public safety ......................................................6,000,000
Public works ......................................................1,550,000
Health and welfare ..............................................950,000
Miscellaneous .......................................................100,000
Total appropriations .....................................$16,600,000

Required
Prepare the general journal entries to record the adopted budget at the beginning of the fiscal year. Show entries in the subsidiary ledger accounts as well as the general ledger accounts.