Question

During June, Busy Beaver bought $5,000 of office supplies on account, and promised to pay the vendor the full amount in July. At the end of June, Busy Beaver estimated that there was $2,000 of office supplies left unused. How much supplies expense should Busy Beaver report for June?

Answer 1

Answer:

$3,000.

Explanation:

Existences of supplies from previous month: $0

Bought supplies during June: $5,000

Supplies unused ar the end of June: $2,000

Supplies used during June = Existences of supplies from previous month + Bought supplies during June - Supplies unused ar the end of June

Supplies used during June = $0 + $5,000 - $2,000

Supplies used during June = $3,000

The adjusting entry to record an accrued expense is:

Debit to Supplies expense account  (increases of expense)

Credit to Supplies stocks account (decreases of asset)