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

Question

Drake Woodward

Business

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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Reed Garza · Answer 1

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