Appropriations, Encumbrances, and Expenditures. The finance director of the Town of Liberty has asked you to determine whether the appropriations, expenditures, and encumbrances comparison for Office Supplies for a certain year (reproduced as follows) presents the information correctly. You determine that the General Fund chart of accounts describes office supplies as “tangible items of relatively short life to be used in a business office.” You also determine that the transfer of stationery, at cost, to the town water utility was properly authorized; the Water Utility Fund is to pay the General Fund $330 for the supplies. The transfer of $46,000 from Office Supplies to Personal Services was made by an accounting clerk, without the knowledge of managers, to avoid reporting that the Personal Services appropriation had been over expended.

Required

To determine whether the following budgetary comparison is correct, you need to compute each of the following. Organize and label your computations so the finance director can understand them.

a. The final amended amount of the appropriation for Office Supplies for the year.

b. The valid amount of encumbrances outstanding against this appropriation at the end of the year.

c. The net amount of expenditures made during the year that were properly chargeable to this appropriation.

d. The unencumbered unexpended balance of this appropriation.

TOWN OF LIBERTY General Fund Appropriation, Expenditures, and Encumbrances
			Encumbrances
Purchase No.	Explanation	Appropriations	Debits	Credits	Expenditures	Available Balance
	Budget legally approved	62,200				62,200
350	Purchase order—computer paper		600			61,600
356	Purchase order—stationery			420		62,020
	Refund of prior year expenditure	30				62,050
370	Purchase order—filing supplies		400			61,650
350	Invoice			605	605	61,045
378	Purchase order—computer		3,160			57,885
380	Contract for washing office windows		2,000			55,885
356	Invoice			420	420	55,885
	Cost of stationery issued to
	town’s water utility	330				56,215
	Refund on P.O. 350	10				56,225
370	Invoice			400	425	55,800
380	Invoice				2,000	53,000
385	Purchase order—furniture		7000			46,000
	Transfer to Personal Services
	appropriation	(46,000)				0

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