Question

On December 31, Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account. However, a physical count of the supplies determined that only $350 of supplies actually remain in the supply cabinet. Select the adjusting entry made on December 31, to record the amount of supplies that had been used during the year.

Answer 1

Answer:

Debit  Supplies expense account   $650

Credit supplies account                   $650

Explanation:

When supplies are purchased but yet to be used, the entries required are

Debit supplies account

Credit cash/accounts payable

When supplies are used up, the entries required are

Debit  Supplies expense account

Credit supplies account

As such where On December 31, Treats Catering Inc.'s trial balance shows a $1,000 balance in the Supplies account. However, a physical count of the supplies determined that only $350 of supplies actually remain in the supply cabinet, the supplies used up

= $1,000 - $350

= $650

adjusting entries required

Debit  Supplies expense account   $650

Credit supplies account                   $650

Being entries to recognized supplies used up.