Expenses vs. Expenditures John Wesley Gilbert Academy, a small governmental pre-school, began operations on January 1, 2024,

Expenses vs. Expenditures

Transcribed Image Text:

John Wesley Gilbert Academy, a small governmental pre-school, began operations on January 1, 2024, with $1,750,000 cash and $70,000 worth of equipment, on which $42,000 was owed to Regional Bank. The equipment was expected to have a remaining useful life of 4 years with $5,500 salvage value. During its first year of operations, ending December 31, 2024, John Wesley Gilbert Academy paid or accrued the following: 1. Bought software, games, books worth $250,000, $170,000 in cash and $80,000 on account on 5/1/2024. Distributed $152,000 to needy children over the course of the year. (Hint: Just because you buy something, is it an expense or an expenditure?) 2. Salaries and other personnel costs, $415,000 3. They buy a building, purchased for $160,000 in February 2024 (30 years expected economic life, no salvage value; land worth $45,000 and building worth $115,000. Assume it has not changed in value since then). Record Purchase and any end of year depreciation 4. Debt Service: a. Interest at 5% APR on the equipment note and $2,000 of principle is paid on the first of the month, every month. Record the journal entry once and tell me how many months they record this year. b. Interest at 4.5% APR on the software account and $1,500 of principle is paid on the first of the month, every month. Record the journal entry once and tell me how many months they record this year. 5. Office supplies, paid for with cash and used, $22,300 6. Fundraising costs for fieldtrips, $800, paid for with cash. last 8 years with salvage value of $9,000. Paid with cash. 8. Utilities, $3,300. Compute for John Wesley Gilbert Academy, for the year ended December 31, 2024, its total expenses and expenditures, first as an internal service fund and second as a governmental fund. Use the purchase method for governmental and consumption for proprietary fund. Use the straight-line method for any depreciation. Remember, ISF is using accrual basis of accounting and Governmental fund is using modified basis of accrual. It matters when counting number of payments. Expenses Software, games, and books Salaries and other personnel costs Interest on Notes (I only want one month just so you can show me you know how to do it) Principal of Notes (I want all the months.) Office supplies costs Fundraising costs Capital Outlay Depreciation Utilities Cost Total Expenditures John Wesley Gilbert Academy, a small governmental pre-school, began operations on January 1, 2024, with $1,750,000 cash and $70,000 worth of equipment, on which $42,000 was owed to Regional Bank. The equipment was expected to have a remaining useful life of 4 years with $5,500 salvage value. During its first year of operations, ending December 31, 2024, John Wesley Gilbert Academy paid or accrued the following: 1. Bought software, games, books worth $250,000, $170,000 in cash and $80,000 on account on 5/1/2024. Distributed $152,000 to needy children over the course of the year. (Hint: Just because you buy something, is it an expense or an expenditure?) 2. Salaries and other personnel costs, $415,000 3. They buy a building, purchased for $160,000 in February 2024 (30 years expected economic life, no salvage value; land worth $45,000 and building worth $115,000. Assume it has not changed in value since then). Record Purchase and any end of year depreciation 4. Debt Service: a. Interest at 5% APR on the equipment note and $2,000 of principle is paid on the first of the month, every month. Record the journal entry once and tell me how many months they record this year. b. Interest at 4.5% APR on the software account and $1,500 of principle is paid on the first of the month, every month. Record the journal entry once and tell me how many months they record this year. 5. Office supplies, paid for with cash and used, $22,300 6. Fundraising costs for fieldtrips, $800, paid for with cash. last 8 years with salvage value of $9,000. Paid with cash. 8. Utilities, $3,300. Compute for John Wesley Gilbert Academy, for the year ended December 31, 2024, its total expenses and expenditures, first as an internal service fund and second as a governmental fund. Use the purchase method for governmental and consumption for proprietary fund. Use the straight-line method for any depreciation. Remember, ISF is using accrual basis of accounting and Governmental fund is using modified basis of accrual. It matters when counting number of payments. Expenses Software, games, and books Salaries and other personnel costs Interest on Notes (I only want one month just so you can show me you know how to do it) Principal of Notes (I want all the months.) Office supplies costs Fundraising costs Capital Outlay Depreciation Utilities Cost Total Expenditures