Project Three

Recording Expenditure Transactions

Learning Objectives

In this project, you will learn to:

Prepare modified accrual basis expenditure entries for a variety of operating activities Expenditure transactions are recorded in governmental funds on the modified accrual basis. In this module we will make several expenditure entries for governmental funds.

1)Wages and Salaries

Read the email below received from the Comptroller of the Town of Oakville (document #301):

General Government

$3,100,000

Public Safety

4,700,000

Public Works

750,000

Culture and Rec.

560,000

Be sure to note the departments for the expenditures; the non-expenditure parts of the journal entry can be marked to Department #000.

2)Supplies

The following email was received from the administration office of the Town of Oakville (document #302):

Supplies - Purchase and usage

To: Junior Accounting Staff

From: Administration Office of the Town of Oakville

The following invoice was received from Mega Office: Invoice: 302

From: Mega Office

To: Town of Oakville Date: 03/31/2017

Qty.

Item

Total

1

Various assortment of office supplies

$1,462,000

$1,369,000 was paid to Mega Office from the Town's bank account, the remaining balance will remain in Accounts Payable for now.

The amount of supplies used by each of the departments is recorded in the following table.

Department

Usage

General Government

$415,000

Public Safety

595,000

Public Works

260,000

Culture & Recreation

128,000

The Town of Oakville uses the Consumption Method to account for supplies.

Hints:

All these transactions belong in the General Fund.

The department number is a crucial part of this entry since this is an expenditure transaction.

Supplies inventory is not associated with a particular department.

3)Purchase of Long-Lived Assets

The following email was received from the Administration Office (document #303):

4)Building and Infrastructure

The following email was received from the Administration Office (document #304):

5)Transfer Money to Debt Service Fund

On March 31, 2017 the town transferred $1,400,000 to the debt service fund to cover required interest and principal on outstanding debt. The reference for this transaction is document #305.This is a non-reciprocal transfer.While the overall cash balance of the city remains unchanged, record separate journal entries for the general fund and debt service fund for this transaction so that the cash balance is properly denoted for each fund.

STEPS:1)Record the journal entries from #1-5 in the Project 3 tab.2)Post all journal entries to the GL tab.

Notes for Government-Wide Statements

The following information pertains to creation of the government-wide statements. No entry needs to be made now. Make note of the following information to use in the final project.

The following newly acquired assets will have to be added to the government-wide statements:

Equipment

$1,254,000

Buildings

600,000

Infrastructure

2,446,000

General Government

$224,000

Public Safety

188,000

Public Works

30,000

Culture and Recreation

299,000

On March 31, 2017 the town recognized vacation pay to be paid in the future. This transaction has to be recorded only in the government-wide statements. No accounting entry is required at the fund level, but an adjustment will have to be made to incorporate the expenses in the government-wide statement for the following amounts.