Q1. ABC Construction receives an annual appropriation to perform construction activities. ABC does not use commitment accounting; instead, it obligates funds upon the award of contracts. Prepare budgetary and proprietary journal entries to record the following transactions. (1.5 Marks)

1. ABC received an appropriation of $3,000,000.
2. The Office of Management and Budget apportioned $750,000 of the appropriation to the Department of Domestic Construction, which oversees the ABC.
3. The Department allotted the entire $750,000 apportionment to the ABC.
4. ABC awarded a building construction contract for $450,000.
5. The contractor completed construction of the building. Because of a change order, however, the total cost of the work was $486,000. ABC accepted the work and recorded the asset and the invoice for $486,000.

Answer:

Q2. An NFPO operates a clinic that provides services to substance abusers. During calendar year 2015, it receives the following donations that may be used for any purpose and at any time:

(1 Marks)

1. $37,500 of cash.
2. 150 shares of stock having a fair value of $60 a share at the time of the donation.
3. Medical supplies (from a pharmaceutical company) having a fair value of $15,000.

Make necessary journal entries in the books of NFPO to record the above transactions.

Answer: