Question

Adjustment for Prepaid Expense The supplies account had a beginning balance of $3,690 and was debited for $1,700 for supplies purchased during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of supplies on hand is $1,290.

Answer 1

Answer:

Dr supplies expense   $4,100

Cr supplies                                       $4,100

Explanation:

Supplies used in the year needs to be ascertained before any adjusting entry can be posted.

Supplies used=beginning supplies+purchases-ending supplies

beginning supplies is $3,690

purchases of supplies was $1,700

ending balance of supplies was $1,290

supplies used=$3,690+$1,700-$1,290=$ 4,100.00  

The used portion of supplies would be debited to supplies expense while supplies inventory is credited with the same amount.