(Relationship between encumbrances and free balance; appropriation/ expenditure ledger)

The city council made an appropriation to the police department of $\$ 100,000$ for the purchase of supplies, equipment, and vehicles.

a. The department placed an order for 10 motorcycles, estimated to cost $\$ 5,000$ each.

b. The department placed an order with Owen Supply Company for crime prevention supplies; the estimated cost of the order was $\$ 30,000$.

c. The motorcycles arrived in good condition, along with an invoice for $\$ 50,000$.

d. An order was placed for radio equipment; estimated cost was $\$ 10,000$.

e. The supplies ordered in part

(b) arrived, along with an invoice for $\$ 32,000$.

f. The radio equipment was received in acceptable condition; actual cost was $\$ 9,000$.
g. The department purchased a new firearm for $\$ 250$ cash, on an "emergency" basis, directly from a local dealer; no order had been placed.
Required: 1. Prepare an appropriation/expenditure ledger. Use columns for Appropriations, Encumbrances (Dr. and Cr.), Expenditures, and Available balance.
2. What was the free balance at the end of the period?