Question

Ace Training supplies clothing to qualified low income families. Ace buys damaged lots from suppliers and sells them to local organizations at small markups. Ace has committed to a break even budget for this year and as such uses an encumbrance system to manage its expenses. The board has approved an annual budget of $47,000 for the purchase of clothing, most of which is expected to arrive in the first quarter of the year. Ace has set an internal allowance of $15,000 per month for each of the first three months. During the month of January, 2013, the following transactions occurred:
January 2, 2013 ordered $25,000 of clothing to be shipped in 4 lots in each of the next 4 months
January 12, 2013 received $5,000 of goods
January 14, 2013 returned $2,000 of goods as not saleable
January 31, 2013 received another $3,000 of goods
Janaury 31, 2013 paid $5,000 for the goods received
Required
Prepare the journal entries that would be made using the encumbrance system.


$1.99
Sales0
Views41
Comments0
  • CreatedJune 09, 2015
  • Files Included
Post your question
5000