Question
Expenditures vs. Expenses Jerrys Dreams, a small governmental pre-school, began operations on January 1, 20X3, with $1,350,000 cash and $60,000 worth of equipment, on which
Expenditures vs. Expenses
Jerrys Dreams, a small governmental pre-school, began operations on January 1, 20X3, with $1,350,000 cash and $60,000 worth of equipment, on which $45,000 was owed to Regional Bank. The equipment was expected to have a remaining useful life of 5 years with $5,000 salvage value. During its first year of operations, ending December 31, 20X3, Jerrys Dreams paid or accrued the following:
Bought software, games, books worth $270,000, $180,000 in cash and $90,000 on account on 6/1/20X3. Distributed $152,000 to needy children over the course of the year. (Hint: Just because you buy something, is it an expense or an expenditure?)
Salaries and other personnel costs, $415,000
They buy a building, purchased for $150,000 in March 2023 (30 years expected economic life, no salvage value; land worth $40,000 and building worth $110,000. Assume it has not changed in value since then). Record Purchase and any end of year depreciation.
Debt Service:
Interest at 5% APR on the equipment note and $2,000 of principle is paid on the first of the month, every month. Record the journal entry once and tell me how many months they record this year.____________________
Interest at 6% APR on the software account and $1,500 of principle is paid on the first of the month, every month. Record the journal entry once and tell me how many months they record this year._____________________
Office supplies, paid for with cash and used, $25,700
Fundraising costs for fieldtrips, $600, paid for with cash.
Capital outlay: truck to deliver books purchased on April 1, 20X3, $42,000, expected to last 10 years with salvage value of $7,000. Paid with cash.
Utilities, $3,800.
Compute for Jerrys Dreams, for the year ended December 31, 20X3, its total expenses and expenditures, first as an internal service fund and second as a governmental fund. Use the purchase method for governmental and consumption for proprietary fund. Use the straight-line method for any depreciation.
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| Expenses | Expenditures |
| Software, games, and books
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| Salaries and other personnel costs |
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| Interest on Notes (I only want one month just so you can show me you know how to do it) |
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| Principal of Notes (I want all the months.)
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| Office supplies costs |
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| Fundraising costs
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| Capital Outlay
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| Depreciation
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| Utilities Cost
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| Total
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