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4 - 1 8 . Recording Encumbrances and Expenditures. ( LO 4 - 1 ) During the current year, the City of Hickory Hills issued
Recording Encumbrances and Expenditures. LO
During the current year, the City of Hickory Hills issued purchase orders to various vendors in the
amounts shown for the following functions of the city:
General Government $
Public Safety Public Works
Culture and Recreation
Health and Welfare
Miscellaneous
Total $
All goods ordered during the year were received at the following actual costs:
General Government $
Public Safety
Public Works Culture and
Recreation
Health and Welfare
Miscellaneous
Total $
Required
a Prepare a summary journal entry in the General Fund general journal to record the issuance of
purchase orders. 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 the year. 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?
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