At the beginning of the month, supplies were $ 3,500. During the month, $ 5, 000 of supplies were purchased. At month's end, 1,500 of supplies are still on hand.

1. What is the bullet adjusting entry?

2. What is the bullet ending balance in the Supplies account?

1. The adjusting entry is as follows:

Supplies expense A/c Dr $7,000

To Supplies A/c $7,000

(Being supplies account is adjusted)

The supplies expense is computed below:

= Supplies opening balance + purchase of supplies - supplies are still on hand

= $3,500 + $5,000 - $1,500

= $7,000

2. The ending balance in the supplies account is $1,500 only which are still on hand.