Question

Solomon Islands government health care incorporates its budget in its accounting system and encumbers all purchase orders and contracts. Prior to the start of the year, the governing board adopted a budget in which agency revenues were estimated at $6000 and expenditures of $5000 were appropriated. 2. During the year, the SI government health collected $6000 in fees, grants, taxes, and other revenues. 3. It ordered goods and services for $4000. 4. During the year it received and paid for $3000 of goods and services that had been previously encumbered 5. It incurred $2000 in other expenditures for goods and services that had not been encumbered.

REQUIREMENT: 1. Prepare journal entries of the above transactions. 2. Prepare end of year Closing entries 3. Prepare Fund balance and Encumbrance ledger accounts

Answer 1