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6 January, 12:14

The Don't Bite Me Pest Control Company has 10,000 gallons of insecticide supplies on hand that cost $300,000; a bill from the vendor for $100,000 of these supplies has not yet been paid. The company expects to earn $800,000 for its services when it uses the insecticide supplies. The company would report a supplies asset in the amount of: A. $10,000B. $200,000C.$300,000D. $800,000

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  1. 6 January, 12:31
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    C.$300,000

    Explanation:

    Data provided in the question

    Number of gallons required = 10,000

    Cost of supplies on hand = $300,000

    Not paid amount = $100,000

    Earning from services = $800,000

    So by considering the above information, the supplies assets should be recorded at cost or net realizable value whichever is lower

    So in this case, the supplies value is $300,000 and the same is to be recorded in the financial statements
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