Question

The supplies account had a beginning balance of $1,750. Supplies purchased during the period totaled $3,500. At the end of the period before adjustment, $350 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:

Debit Supplies expense   $4,900

Credit Supplies account   $4,900

Explanation:

When supplies are purchased, the entries required includes a debit to supplies account, and a credit cash or accounts payable (depending on whether the purchase was done via cash or on account).

For supplies used up, Debit supplies expense and credit Supplies account. The movement in the supplies account over a period is as a result of purchases and use such that it may be expressed as

opening balance + purchases - supplies used = Closing balance

$1750 + $3,500 - supplies used = $350

Supplies used = $1750 + $3,500 - $350

= $4,900