Question
Jenson City has a June 30 fiscal year end. At the beginning of the year, the city had $75,000 of supplies in inventory. During the
Jenson City has a June 30 fiscal year end. At the beginning of the year, the city had $75,000 of supplies in inventory. During the year, the city purchased $625,000 of supplies for use by activities accounted for in the General Fund. The city used $450,000 of those supplies during the year. The city had $250,000 of supplies in inventory at year end. What are the correct balances related to supplies expenditures and inventory at June 30 in the governmental fund financial statements when using the consumption method?
a) Expenditures $625,000; Supplies inventory $250,000
b) Expenditures $625,000; Supplies inventory $0
c) Expenditures $450,000; Supplies inventory $250,000
d) Expenditures $450,000; Supplies inventory $0
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