Assignment 1- 10 Marks Government Accounting (0502360)

On 20/10 A state hospital contracts for air conditioning repair services that it estimates will cost $50,000.

On 15/12 the contactor completed ONLY 20% of the contract and bills the university $9,900. On 26/12 the hospital paid the contactor in full for the services provided.

On 15/11 year 2 the contractor provided another 60% of the required services and bills the hospital $30,000

On 1/12 year 2 the hospital paid the $30,000 bill.

On 3/3 year 3 the contractor completed the remaining 20% of the contract and bills the hospital $10,800 for the services provided. The hospital paid the bill right away.

Required: prepare ALL the necessary journal entries for encumbrances for years 1 to 3 (i.e. till the end of the contact and closing entry of year 3) using the governmental GAAP method.