On July 12, 2011, Fred City Ordered a New Computer

question 32

Essay

On July 12, 2011, Fred City ordered a new computer at an anticipated cost of $114,400. The computer was received on July 16 with an actual cost of $116,220. Payment was subsequently made on August 15, 2011.
Required:
(A.) Prepare all the required journal entries and identify the type of fund in which each entry was recorded for the Fund Financial Statements.
(B.) Prepare all the required journal entries and identify the type of fund in which each entry was recorded for the Government-Wide Financial Statements.

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Definitions:

Perfectly Competitive Industry

An industry characterized by many small firms, identical products sold by all firms, no barriers to entry or exit, and perfect information among consumers and producers.

AC

Short for Air Conditioning, a system for controlling the humidity, ventilation, and temperature in a building or vehicle.

Price Effect

The impact on consumer behavior and purchase decisions resulting from a change in the price of a good or service.

Quantity Effect

The variation in overall income derived from altering the amount of a product sold, while keeping its price stable.