Question

In: Accounting

Using the following information prepare all appropriate journal entries for years 1 and 2. You are...

Using the following information prepare all appropriate journal entries for years 1 and 2.

You are only required to create entries within the subaccount of “Education and training” you do not have to make any entries for corresponding accounts in other funds.

County regulations require all appropriations lapse at year end.

Year 1:

  1. County appropriated 12K for training.
  2. Consulting contracts worth 10K were signed
  3. Consultants completed all work and billed 10K, which was paid.
  4. Training materials of 1.8K were ordered but not received b year end.

Year 2:

  1. County appropriated 13.5K for training
  2. Training materials ordered in year 1 were received, the actual cost was 1.7K
  3. Authorized contracts for 10.5K of training
  4. After training was received, invoices for 10.8K were presented and paid in full.

Please do not “combine” ANY entries unless absolutely required.

( this will require 16 entries if done correctly.)

Solutions

Expert Solution

County appropriated 12K for training.

Since this is an appropriation, this means that this is an accrued expense.

Training expenses AC Dr   $12K

To Accrued expenses AC CR    $12K

[Being accrued expenses]

Consulting contracts worth 10K were signed

No entry as this is mere a contract.

Consultants completed all work and billed 10K, which was paid.

Consultant expenses AC DR $10K

To Consultant AC CR                      $10K

[Being the invoice has been received]

Consultant AC DR $10K

To Cash AC CR                         $10K

[Being the consultant bill has been paid]

  Accrued expenses AC CR    $12K

TO Training expenses AC Dr   $12K

[Being accrued expenses are reversed]

Training materials of 1.8K were ordered but not received by year end.

Goods in Transit AC DR   $1.8k

To Accrued expenses                $1.8k

[Being the goods are not yet received]

County appropriated 13.5K for training

Training expenses AC Dr   $13.5K

   To Accrued expenses AC CR $13.5K

[Being accrued expenses]

Training materials ordered in year 1 were received, the actual cost was 1.7K

Training material AC DR 1.7k

To supplier AC CR                    1.7k

[being goods are received]

Authorized contracts for 10.5K of training

No entry is required

After training was received, invoices for 10.8K were presented and paid in full.

Consultant expenses AC DR $10.8K

To Consultant AC CR                      $10.8K

[Being the invoice has been received]

Consultant AC DR $10.8K

To Cash AC CR                         $10.8K

[Being the consultant bill has been paid]

  Accrued expenses AC CR    $13.5K

TO Training expenses AC Dr   $13.5K

[Being accrued expenses are reversed]


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