The following information is available for general expenditures in Lake County:
•Encumbrances for $4,000,000 in purchase orders are outstanding at the beginning of 2020. The orders are delivered in 2020 and the County pays $4,000,000.
•Expenditures for 2020, ordered, delivered and paid, are $45,000,000.
•Near the end of 2020, encumbrances for $6,000,000 in purchase orders are recorded.
Required
a. Prepare the journal entries necessary to record the events of 2020, including any beginning-of-year adjustments and end-of-year closing entries, using the legal budgetary basis.
b. Prepare the journal entries necessary to record the events of 2020, including any beginning-of-year adjustments and end-of-year closing entries, using the GAAP budgetary basis.
c. Using the legal budgetary basis, what amount is reported for expenditures in 2020?
d. Using the GAAP budgetary basis, what amount is reported for expenditures in 2020?

Question

Quizplus · Accepted Answer

The Answer of The following information is available for general expenditures in Lake County:
•Encumbrances for $4,000,000 in purchase orders are outstanding at the beginning of 2020. The orders are delivered in 2020 and the County pays $4,000,000.
•Expenditures for 2020, ordered, delivered and paid, are $45,000,000.
•Near the end of 2020, encumbrances for $6,000,000 in purchase orders are recorded.
Required
a. Prepare the journal entries necessary to record the events of 2020, including any beginning-of-year adjustments and end-of-year closing entries, using the legal budgetary basis.
b. Prepare the journal entries necessary to record the events of 2020, including any beginning-of-year adjustments and end-of-year closing entries, using the GAAP budgetary basis.
c. Using the legal budgetary basis, what amount is reported for expenditures in 2020?
d. Using the GAAP budgetary basis, what amount is reported for expenditures in 2020?

The Following Information Is Available for General Expenditures in Lake