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Accounting Cycle and Financial Reporting

Accounting Cycle and Financial Reporting

IN THE BOOKS OF BOBI

JOURNAL ENTRY

BUDGETARY ACCOUNTS PROPRIETARY ACCOUNTS
Sl. No. Particulars  Debit  Credit Sl. No. Particulars  Debit  Credit
1) Appropriations realized A/c… Dr  $  2,000,000.00 1) No entry
To Unapportioned authority  $  2,000,000.00
2) Unapportioned Authority A/c…Dr  $  2,000,000.00 2) No entry
To Apportionments  $  2,000,000.00
3) Apportionments A/c. Dr  $      500,000.00 3) Fund balance with treasury A/c. Dr  $      500,000.00
To Allotments  $      500,000.00 To capital appropriations  $      500,000.00
4) Allotments Ac..Dr  $      240,000.00 4) No entry
To Obligations-undelivered orders  $      240,000.00
5) Obligations-undelivered orders A/c. Dr  $        20,000.00 5) Operating expenses A/c Dr  $        20,000.00
To Expended Appropriations  $        20,000.00 To fund balance with treasury account  $        20,000.00
6) Allotments Ac..Dr  $          2,000.00 6) Material and supplies A/c..Dr  $        52,000.00
Obligations-undelivered orders A/c. Dr  $      140,000.00 Operating expenses A/c Dr  $        30,000.00
To Expended Appropriations  $      142,000.00 To Accounts payable  $        82,000.00
7) No entry 7) Accounts Payable A/c. Dr  $        82,000.00
To Disbursement in transit  $        82,000.00
8) No entry 8) Salaries  A/c. Dr  $        90,000.00
To Disbursement in transit  $        90,000.00
9) Allotments Ac..Dr  $      172,000.00 9) Disbursement in transit A/c..Dr  $      172,000.00
To Expended Appropriations  $      172,000.00 To fund balance with treasury account  $      172,000.00
10) No entry 10) Salaries A/c. Dr  $        10,000.00
To Salaries payable A/c  $        10,000.00
Materials consumed  $        12,000.00
To material and supply A/c  $        12,000.00
Depreciation A/c Dr.  $          1,000.00
To Accumulated Depreciation on Equipment  $          1,000.00
b)

Preclosing Trial balance

Budgetary accounts:
Appropriations realized  $      434,000.00
Delivered order-obligations unpaid  $      100,000.00
Expended Appropriations  $      334,000.00
c) BALANCE SHEET
Assets
Fund balance with treasure  $      328,000.00
inventory, material, and supplies  $        46,000.00
General property, plants, and equipment  $        30,000.00
Less: Accumulated Depreciation on Equipment  $        (1,000.00)  $        29,000.00
Total Assets  $     403,000.00
Liabilities
Disbursement in transit  $        20,000.00
Accounts payable  $                      –
Salaries Payable  $        10,000.00
Cumulative results of operation  $      373,000.00
Total liabilities  $     403,000.00

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Question 


Accounting Cycle and Financial Reporting

BOBI is responsible for overseeing state inspections of bridges constructed with federal funds. It reports program expenses by the object of account. BOBI does not use commitment accounting but obligates budgetary resources when it enters into contracts or sends purchase orders to buy capital assets, supplies, and materials. It also binds resources for operating leases. The following transactions occurred in October 2013:

Accounting Cycle and Financial Reporting

  1. Congress appropriated $2,000,000 for BOBI’s bridge inspection program activities in fiscal year 2014.
  2. OMB notified DOT that it had apportioned the entire amount of BOBI’s appropriation.
  3. DOT notified BOBI that it had allotted $500,000 of its appropriation for the first quarter of fiscal year 2014.
  4. During October, BOBI entered into the following contracts:

Use the preceding information to do the following:

  1. Prepare a balance sheet, a statement of net costs, and a notice of changes in net position.
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