Problem:
A county engages in basic transactions.
Kilbourne County engaged in the following transactions in summary form during its fiscal year. All amounts are in millions.
1. Its commissioners approved a budget for the current fiscal year. It included total revenues of $860 and total appropriations of $850.
2. It ordered office supplies for $20.
3. It incurred the following costs, paying in cash:
Salaries $610
Repairs $ 40
Rent $ 25
Utilities $ 41
Other operating costs $119
4. It ordered equipment costing $9.
5. It received the equipment and was billed for $10, rather than $9 as anticipated.
6. It received the previously ordered supplies and was billed for the amount originally estimated. The county reports the receipt of supplies as expenditures; it does not maintain an inventory account for supplies.
7. It earned and collected revenues of $865.
a. Prepare journal entries as appropriate.
b. Prepare closing entries as appropriate.
c. What would have been the difference in the year-end financial statements, if any, had the county not made the budgetary entries?