The City of Batavia ordered new computer equipment for $24,000 on November 3, 20X2. The equipment had not been received by December 31, 20X2, Batavia's fiscal year-end. Required: a. Assume that the city has a policy that outstanding encumbrances lapse at year-end. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) (1) Prepare the entry to record the encumbrance on November 3, 20X2. (2) Prepare the entries required on December 31, 20X2 (3) Assuming that the city council accepts outstanding encumbrances in its budget for the next fiscal period (20X3), prepare entries on January 1, 20x3 (4) Prepare entries on January 18, 20X3, when the equipment was received with an invoice cost of $24.500 and accepted by the city. (5) Prepare the entry on December 31, 20X3, to close the expenditures account. View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the entry for the equipment order and encumbrances in 20X2. Note: Enter debits before credits. Date Nov 03 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the entry to close the remaining budgeted encumbrances in 20X2. Note: Enter debits before credits. Date Dec 31 General Journal Debit Credit View general journal Record entry Clear entry > View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the entry to reserve the actual fund balance for the outstanding encumbrances at year-end in 20X2. Note: Enter debits before credits. Date Dec 31 General Journal Debit Credit View general journal Record entry Clear entry > View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the entry to reverse the prior-year encumbrance reserve in 20X3. Note: Enter debits before credits. Date Jan 01 General Journal Debit Credit > View general journal Record entry Clear entry View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the entry to establish the budgetary control over the encumbrances renewed from the prior year in 20X3. Note: Enter debits before credits. Date Jan 01 General Journal Debit Credit View general journal Record entry Clear entry View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the entry to remove the budgetary reserve for the goods received in 20X3. Note: Enter debits before credits. Date Jan 18 General Journal Debit Credit Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the expenditure for the goods received at the actual cost in 20X3. Note: Enter debits before credits. Date Jan 18 General Journal Debit Credit > Record entry Clear entry View general journal View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the entry to close the 20X3 expenditures account. Note: Enter debits before credits. Date Dec 31 General Journal Debit Credit Record entry Clear entry View general journal b. Assume the city's policy is that outstanding encumbrances are nonlapsing. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) (1) Prepare the entry to record the encumbrance on November 3, 20X2. (2) Prepare the entries required on December 31, 20X2 (3) Prepare the entry on January 1, 20X3, to classify the expenditure in 20X2, the year the encumbrance was initiated. (4) Prepare the entry on January 18, 20X3, when the equipment was received for $24,500. The City Council approved the additional $500 equipment cost as an addition to 20X3's expenditures. (5) Prepare the entries on December 31, 20X3, to close the expenditures accounts. View transaction list Journal entry worksheet < 1 2 34 5 6 7 Record the entry for the equipment order and encumbrances in 20X2 Note: Enter debits before credits Date Nov 03 General Journal Debit Credit View transaction list Journal entry worksheet 1 2 3 4 5 6 7 Record the entry to close the remaining budgeted encumbrances in 20X2. Note: Enter debits before credits, Date Dec 31 General Journal Debit Credit Journal entry worksheet < 1 2 3 4 5 6 7 Record the entry to reserve the fund balance for the outstanding encumbrances in 20X2. Note: Enter debits before credits. Date Dec 31 General Journal Debit Credit Record entry Clear entry View general journal > Journal entry worksheet < 1 2 3 4 5 6 7 Record the entry to reclassify the reserve from the prior year, 20X2, in the current year, 20X3. Note: Enter debits before credits. Date Jan 01 General Journal Debit Credit View general journal Record entry Clear entry Journal entry worksheet < 1 2 3 4 5 6 7 Record the actual expenditure for the goods received in 20X3. Note: Enter debits before credits. Date Jan 18 General Journal Debit Credit View general journal Record entry Clear entry > Journal entry worksheet < 1 2 3 4 5 16 7 Record the entry to close the expenditures account for the prior-year encumbrances in 20X3. Note: Enter debits before credits. Date Dec 31 General Journal Debit Credit 7 View general journal Record entry Clear entry Journal entry worksheet < 2 3 4 5 9 7 Record the entry to close the expenditures for the current year, 20X3. Note: Enter debits before credits. Date Dec 31 > General Journal Debit Credit View general journal Record entry Clear entry c. Now assume the city has a policy that outstanding encumbrances are nonlapsing, but the 20X3 City Council decided, during its budget hearings for 20X3, not to accept the encumbrance for the computer equipment that had been ordered on November 3, 20X2. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) (1) Prepare the entry required on January 1, 20X3, to cancel the encumbrance reserve for the equipment ordered on November 3, 20X2. View transaction list Journal entry worksheet < 1 Record the entry to cancel the 20X2 order for equipment. Note: Enter debits before credits Date Jan 01 General Journal Debit Credit