Question

At the beginning of December, ABC Company had $1,500 in supplies on hand. During the month, supplies purchased amounted to $2,900, buy by the end of the month the supplies balance was only $2,200. What is the appropriate month-end adjusting entry

Answer 1

Answer and Explanation:

The adjusting entry is as follows:

Supplies expense Dr $2,200

To Supplies $2,200

(being the supplies expense is recorded)

Here the supplies expense is debited as it increased the expenses and credited the supplies as it decreased the assets

The computation is

= Opening supplies + purchased - closing supplies

= $1,500 + $2,900 - $2,200

= $2,200