Question

At March 1, 2013, Minutemen Corp. had supplies on hand of $500. During the month, Minutemen purchased supplies of $1,200 and used supplies of $1,400. The March 31 adjusting journal entry should include a

Answer 1

Answer:

Explanation:

Opening stock Mar 1 2013 $500

Purchases in the month. $1,200

Used stocks in the month. $1,400

Closing stock at 31st Mar $ 300

Inventory Account. Dr. Cr

Opening stock. 500

Purchases. 1,200

Used stock. 1,400

Closing bal c/d. 300

Total. 1,700. 1,700

Balance b/f. 300

Answer 2

Answer:

Debit supplies expense  $1,400

Credit Supplies account  $1,400

Explanation:

The movement in supplies is as a result of purchases and sales during the period. While purchases increases the balance, sales reduces it.

On purchase of $1,200,

Debit Supplies account $1,200

Credit Bank/Cash account $1,200

On use of $1,400

Debit supplies expense  $1,400

Credit Supplies account  $1,400

This will ensure that the balance in the supplies account is $300 considering the opening balance, purchases and sales.