Question
[Para. 4-a-13] Adjusting Entry. Because the city uses a periodic inventory system a physical count of consumable supplies was taken at year-end showing an ending
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[Para. 4-a-13] Adjusting Entry. Because the city uses a periodic inventory system a physical count of consumable supplies was taken at year-end showing an ending balance of $60,420, a increase of $1,420 during the year. The city uses the consumption method of accounting for its inventory in the General Fund and at the government-wide level. Recall that inventory purchases were initially recorded as expenditures in the General Fund and as expenses at the government-wide level. Therefore, an increase in inventory requires adjustments to the expenditure and expense accounts of the General Government function.
Required: Prepare the adjusting journal entries in the General Fund journal to adjust General Government expenditures and Inventory of Supplies, and Fund BalanceNonspendableInventory of Supplies and Fund Balance accountsUnassigned accounts to the correct balances. In the governmental activities journal adjust the ExpensesGeneral Government and Inventory of Supplies accounts.
Post all journal entries to the ledgers: After reviewing all entries for accuracy, including year and paragraph numbers, post all entries to the general ledger accounts and to all subsidiary ledger accounts, by clicking on [Post entries]. Also post all entries in the governmental activities journal.
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