The Fire Department of a certain city received an appropriation in the amount of $12,000,000 for the fiscal year ended December 31, 2009. During the month ended January 31, 2009, the following transactions occurred: (a) purchase orders were issued in the amount of $400,000; (b) purchase orders, related to (a) above, were filled in the amount of $370,000; the related invoice amount was $368,000; invoices were paid in the amount of $350,000; (c) salaries were accrued and paid in the amount of $580,000; (d) the appropriation was increased in amount of $10,000. The amount available for the Fire Department as of January 31, 2009 would be:

Question

Quizplus · Accepted Answer

The amount available for the Fire Department as of January 31, 2009, can be calculated as follows:

Appropriation received = $12,000,000
Less: Purchase orders issued = $400,000
Amount available = $11,600,000
Less: Purchase orders filled = $370,000
Amount payable = $11,230,000

The related invoice amount is $368,000, but only $350,000 was paid. Therefore, the amount payable is reduced by $18,000.

Amount payable = $11,230,000 - $18,000
Amount payable = $11,212,000

Salaries accrued and paid = $580,000

The appropriation was increased by $10,000.

Amount available = $11,212,000 + $10,000
Amount available = $11,222,000

Therefore, the amount available for the Fire Department as of January 31, 2009, is $11,032,000 (option C).

The Fire Department of a Certain City Received an Appropriation