Question

On January 1st, Great Designs Company had a debit balance of $1,450 in the Office Supplies account. During the month, Great Designs purchased $115 and $160 of office supplies and journalized them to the Office Supplies asset account upon purchasing. On January 31st, an inspection of the office supplies cabinet shows that only $350 of Office Supplies remains in the locker.
1. Prepare the January 31st adjusting entry for Office Supplies.

Answer 1

Answer:

Debit write off account (p/l)           $1,375

Credit Office Supplies account      $1,375

Being entries to write off Office Supplies for the month of January

Explanation:

On January 1st

Office Supplies account balance = $1,450

Purchases = $115 + $160

                  = $275

Balance in Office Supplies account balance = $1,450 + $275

                                                                          = $1,725

On January 31st, an inspection of the office supplies cabinet shows that only $350 of Office Supplies remains in the locker.

Amount to be written off the Office Supplies account

= $1,725 - $350

= $1,375

To adjust this,

Debit write off account (p/l)           $1,375

Credit Office Supplies account      $1,375

Being entries to write off Office Supplies for the month of January.