Near the end of 2020, Lewis County's general fund issued purchase orders for merchandise totaling $3,100,000. These purchase orders were still outstanding at year-end. In 2021, the merchandise was delivered, and the county paid the supplier $3,100,000 in cash. The county uses the purchases method to account for merchandise.
Required
a. Prepare the journal entries necessary to record the above events in 2021, using the legal budgetary basis. Include any beginning-of-year adjusting entries, as well as end-of-year closing entries.
b. Repeat the requirements of a., using the GAAP budgetary basis.

Question

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The Answer of Near the end of 2020, Lewis County's general fund issued purchase orders for merchandise totaling $3,100,000. These purchase orders were still outstanding at year-end. In 2021, the merchandise was delivered, and the county paid the supplier $3,100,000 in cash. The county uses the purchases method to account for merchandise.
Required
a. Prepare the journal entries necessary to record the above events in 2021, using the legal budgetary basis. Include any beginning-of-year adjusting entries, as well as end-of-year closing entries.
b. Repeat the requirements of a., using the GAAP budgetary basis.

Near the End of 2020, Lewis County's General Fund Issued