At the beginning of a calendar year, the city council approves a General Fund budget put forward by the city manager in which $1,025,000 is expected in inflows (revenues) and $950,000 is expected in outflows expenditures).
A week into the new year the city issues a purchase order to buy three police cars at a cost of $75,000 each. Prepare the journal entry to record this event.
A month after three police cars were ordered and encumbered by a city, two of the cars are delivered. The invoice price of each car was $80,000. Record the entry for the receipt of the two cars.