Question

Sebadoah is a barber who does his own accounting for his shop. when he buys supplies he routinely debits supplies expense. sebadoah purchased $1,500 of supplies in january and his inventory at the end of january shows $300 of supplies remaining. what adjusting entry should sebadoah make on january 31?

Answer 1

Sebadoah should decrease his supply expense to 1,100 for the month of February. The extra $100 is just in case the month of February is busier and he'll have enough to supplies for the demand.