The transactions that follow relate to the Danville County Controllers Department over a two-year period.

Year 1

The county appropriated $12,000 for employee education and training

The department signed contracts with outside consultants to conduct accounting and auditing workshops. Total cost was $10,000

The consultants conducted the workshops were paid $10,000 The department ordered books and training materials, which it estimated would cost $1,800. As of year-end the materials had not been received.

Year 2

The county appropriated $13,500 for employee education and training The department received and paid for the books and training materials that it ordered the previous year. Actual cost was only $1,700. The countys accounting policies require that the books and training materials be charged as an expenditure when they are received ( as opposed to being recorded as inventory and charged as an expenditure when used).

It authorized employees to attend various conferences and training sessions. Estimated cost was $10,500

Employees submitted $10,800 in reimbursement requests for the conference and training sessions they attended. The department paid them the requested amounts and at year's end did not expect to receive any additional reimbursement requests.

1. Prepare all required journal entries that would affect the expenditure subaccount education and training including budgetary and closing entries. Assume that all appropriations lapse at year-end (thus, all expenditures in year 2 would be charged against that years appropriation of %13,500 even if the goods and services were ordered in year 1).

2. Indicate (specifying accounts and dollar amounts) how the transaction would be reported in the countys general fund.

A. Balance sheet

B. Statement of revenues and expenditures

3. Alternatively, suppose that the county did not record its budget and did not encumber its commitments. What would be the difference in the year-end financial statements?

4. Assume instead that appropriations for goods on order at year-end do not lapse. When the goods are received they are charged as expenditures against the budget of the year in which they were encumbered. How would this change affect your entries and the year-end financial statements? How would it affect the amount that the department had available to spend in year 2 on goods or services not previously ordered?