Question

The supplies account had a beginning balance of $1,804. Supplies purchased during the period totaled $3,283. At the end of the period before adjustment, $439 of supplies was on hand. Required: Prepare the adjusting entry for supplies on December 31. Refer to the Chart of Accounts for exact wording of account titles.

Answer 1

Answer: The adjusting entry is:

                                                                               Debit ($)         Credit ($)

Supplies expenses                                               4,648

Supplies                                                                                            4,648

Being adjustment to account for supplies expenses incurred at year end

Explanation: The supplies account is an asset account, so it has a debit balance. To arrive at the supplies expenses amount journalzed above, we have to do a movement schedule for the supplies account as follows:

Opening balance                                        $1,804

Purchases during the period                      3,283

Supplies expenses                                      (XXX)

Balance                                                           439

To get the value of XXX above, we do $1,804+3,283-XXX=439; using subject of the formula, XXX = $1,804+3,283-439 = $4,648.