Question

Speedy Clean laundry Purchased $6,500 worth of laundry supplies on Jun 2 and recorded the purchase as an asset. On Jun 30, an inventory of the laundry supplies indicated only $1,500 on hand. The adjusting entry that should be made by the company on Jun 30 is

Answer 1

Answer:

Explanation:

Journal Entry: The journal entry shows the recording of transactions which follows double entry system./ Every account has double entry. In journal entry, there is one debit and one credit side. Debit side records expenses and losses whereas credit side records income and gains.

Since, in the given question, the laundry supplies purchase on Jun 2 which is $6,500 but on June 30, it only holds $1,500. So, on June 30, the company has $6,500 - $1,500 = $4,000 supplies.

And, the company purchase supplies so it is a expense for a company which would be debited in respect to laundry supplies

Hence, The adjusting entry would be

Laundry supplies expense A/c Dr $4,000

   To Laundry supplies $4,000

(Being laundry supplies adjusted)