Question

The balance in the supplies account, before adjustment at the end of the year, is $4,850. Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is $880.

Answer 1

Answer:

Supplies Expense           $3970 Dr

        Supplies Account      $3970 Cr

Explanation:

The adjusting entry is made at the end of the accounting period. If on the day of adjusting entry, the supplies account shows a higher balance then the supplies on hand, we will need to charge the difference between these two amounts to the supplies expense account and reduce the supplies account by the same amount.

The difference between supplies account and supplies on hand is 4850 - 880 = $3970