Author Question: (Journal entries - set of transactions regarding contracts) The Federal Bureau of Building ... (Read 53 times)

APUS57 · **on:** Jul 5, 2018

(Journal entries - set of transactions regarding contracts)

The Federal Bureau of Building Construction (BBC) receives an annual appropriation to perform construction activities.

BBC does not use commitment accounting; instead, it obligates funds upon the award of contracts Prepare budgetary and proprietary journal entries to record the following transactions.
a. BBC received an appropriation of 2,000,000
b. The Office of Management and Budget apportioned 500,000 of the appropriation to the Department of Domestic Construction, which oversees the BBC
c. The Department allotted the entire 500,000 apportionment to the BBC.
d. BBC awarded a building construction contract for 300,000
e. The contractor completed construction of the building. Because of a change order, however, the total cost of the work was 324,000 . BBC accepted the work and recorded the asset and the invoice for 324,000
f. BBC sent a disbursement schedule to the Treasury requesting payment of the 324,000
g. Treasury notified BBC that payment was made to the contractor for 324,000
h. At year-end, BBC recorded six months' depreciation (16,200) on the building

Question 2

A method of accounting under which revenues are recorded when cash is received and expenses are recorded when cash is paid is known as ___________________ _.
Fill in the blank(s) with correct word

Beatricemm · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

a. Budgetary
Other appropriations realized 2,000,000
Unapportioned authority 2,000,000

Proprietary
Fund balance with Treasury 2,000,000
Unexpended appropriations -
Appropriations received 2,000,000

b. Budgetary
Unapportioned authority 500,000
Apportionments 500,000

c. Budgetary
Apportionments 500,000
Allotments - realized resources 500,000

d. Budgetary
Allotments - realized resources 300,000
Undelivered orders obligations, unpaid 300,000

e. Budgetary
Undelivered orders obligations, unpaid 300,000
Allotments - realized resources 24,000
Delivered orders obligations, unpaid 324,000

Proprietary
Buildings 324,000
Accounts payable 324,000

Unexpended appropriations - used 324,000
Expended appropriations 324,000

f. Proprietary
Accounts Payable 324,000
Disbursements in transit 324,000

g. Budgetary
Delivered orders obligations, unpaid 324,000
Delivered orders obligations, paid 324,000

Proprietary
Disbursements in transit 324,000
Fund balance with Treasury 324.000

h. Proprietary
Program costs - depreciation 16,200
Accumulated depreciation 16,200

Answer to Question 2

cash basis accounting