On july 1, gilbert county bought computer equipment for use in the administrative offices of the county. the equipment has an estimated useful life of three years and salvage of $10,000. gilbert county has a 6/30 fiscal year-end. assuming that the county maintains its books and records in a manner that facilitates the preparation of fund financial statements, the $85,000 cost of this equipment would require which of the following entries? a. debit expenditures $85,000; credit cash $85,000. b. debit equipment $85,000; credit cash $85,000. c. debit expenses $85,000; credit cash $85,000. d. no entry in the city’s governmental funds

b. Debit Equipment $85,000; Credit Cash $85,000.

Explanation:

Provided information,

Financial year will end on 30 June each year.

The computer equipment is purchased on 1 July

Cost of equipment = $85,000

Note: At the time of purchase as the equipment is long term, it will be accounted as fixed asset and is a capital expenditure, not a revenue expense to be charged in books of account.

Therefore, entry for recording the purchase of computer equipment shall be:

Equipment A/c Dr.             $85,000

     To Cash A/c                                     $85,000

(Recording purchase of equipment in exchange of cash)

answer; career pathways;

answer; ///deficit;