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During fiscal year 2014, the City of Hickory Hills issued purchase orders to various vendors in the amounts shown for the following functions of the

During fiscal year 2014, the City of Hickory Hills issued purchase orders to various vendors in the amounts shown for the following functions of the city:

General Government $ 82,500 Public Safety 148,700 Public Works 130,400 Culture and Recreation 97,300 Health and Welfare 94,800 Miscellaneous 14,200

Total $567,900

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

$ 83,720 147,940 131,140

98,780 93,970 14,300

$569,850

Required

a. Prepare a summary journal entry in the General Fund general journal to record the issuance of purchase orders during fiscal year 2014. 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 fiscal year 2014. 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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