Question

The following events and transactions relate to the purchase and use of supplies inventory for Jedville Township:

On March 21, 2019, supplies were ordered at an estimated cost of $847,000.

Supplies were received on April 4, 2019, and the actual cost of $848,000 was paid in cash.

On December 31, 2019, $80,000 in supplies remain. (Assume there was no beginning balance.)

On February 23, 2020, supplies were ordered at an estimated cost of $855,000.

Supplies were received on March 6, 2020, and the actual cost of $870,000 was paid in cash.

On December 31, 2020, $60,000 in supplies remain.

Required

Prepare journal entries to record the inventory transactions in Jedville's General Fund using the consumption method of accounting for inventory. Record the year-end adjusting and closing entries wherever necessary.

Prepare journal entries to record the inventory transactions in Jedville's General Fund using the purchases method of accounting for inventory. Record the year-end adjusting and closing entries wherever necessary.

Prepare journal entries to record the inventory transactions in Jedville's governmental activities ledger. Record the year-end adjusting and closing entries wherever necessary.

Answer 1

	Journal entries in the books of Jedville's General Fund
Date	Account's tittle	Debit $	Credit $
2019
21-Mar	No jounal entry is required for ordering a supplies
4-Apr	Supplies Inventory	848,000
	Cash		848,000
	( To be record purchase of supplies by cash )
31-Dec	Supplies Expenses ( $ 848,000 - $ 80,000)	768,000
	Supplies Inventory		768,000
	( Supplies are consumed during the year for $ 768,000 and the balance of supplies for $ 80,000 remains at the end of the year)
2020
23-Feb	No jounal entry is required for ordering a supplies
6-Mar	Supplies Inventory	870,000
	Cash		870,000
	( To be record purchase of supplies by cash )
31-Dec	Supplies Expenses ($ 80,000 + $ 870,000 - $ 60,000)	890,000
	Supplies Inventory		890,000
	( Supplies are consumed during the year for $ 890,000 and the balance of supplies for $ 60,000 remains at the end of the year)