E4-18 Recording Encumbrances and Expenditures [LO 4-1]

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:

Required

1. a.&b. Prepare journal entries in the General Fund general journal to record the issuance of purchase orders and to record the receipt of and payment for goods during the year. Also show subsidiary detail for the Encumbrances and Expenditures ledgers. (table for B)
2. 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? (Yes or no)

General Government $ 159, 200 Public Safety 297,000 Public Works 219,400 Culture and 176,700 Recreation Health and Welfare 163, 100 Miscellaneous 24, 100 Total $1,039,500 All goods ordered during the year were received at the following actual costs: General Government $ 154,800 Public Safety 296,700 Public Works 221,800 Culture and Recreation 176,700 Health and Welfare 166,300 Miscellaneous 24,600 Total $1,040,900 CITY OF HICKORY HILLS Appropriations, Expenditures, and Encumbrances Ledger Encumbrances Expenditures Appropriations Account/Description Draw Decrease Balance Duc Balance Appropriations Balance mprom Cr Dr (Cr) Dr (Cr) Cr (Dr) Cr (Dr) General Government Purchase Orders Good received Public Safety Purchase Orders Supplies received Public Works Purchase Orders Supplies received Culture and Recreation Purchase Orders Supplies received Health and Welfare Purchase Orders Supplies received Miscellaneous Purchase Orders Supplies received General Government $ 159, 200 Public Safety 297,000 Public Works 219,400 Culture and 176,700 Recreation Health and Welfare 163, 100 Miscellaneous 24, 100 Total $1,039,500 All goods ordered during the year were received at the following actual costs: General Government $ 154,800 Public Safety 296,700 Public Works 221,800 Culture and Recreation 176,700 Health and Welfare 166,300 Miscellaneous 24,600 Total $1,040,900 CITY OF HICKORY HILLS Appropriations, Expenditures, and Encumbrances Ledger Encumbrances Expenditures Appropriations Account/Description Draw Decrease Balance Duc Balance Appropriations Balance mprom Cr Dr (Cr) Dr (Cr) Cr (Dr) Cr (Dr) General Government Purchase Orders Good received Public Safety Purchase Orders Supplies received Public Works Purchase Orders Supplies received Culture and Recreation Purchase Orders Supplies received Health and Welfare Purchase Orders Supplies received Miscellaneous Purchase Orders Supplies received