On June 1, during its first month of operations, Mathis Spa purchased supplies for $4,500 and debited the supplies account for that amount. At June 30, an inventory of supplies showed $1,000 of supplies on hand. What adjusting journal entry should be made for June?

Question

Kaeden

Business

11 January, 17:04

On June 1, during its first month of operations, Mathis Spa purchased supplies for $4,500 and debited the supplies account for that amount. At June 30, an inventory of supplies showed $1,000 of supplies on hand. What adjusting journal entry should be made for June?

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Answers (1)

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Atlas · Answer 1

June 30 Supplies Expense 3500 Dr

Supplies Account 3500 Cr

Explanation:

The supplies are treated as an asset when they are purchased. However as they are used, they are transferred to expenses account. The adjustment is made at the end of the period that is June 30. The supplies on hand or the ending inventory of supplies is $1000 which means that supplies worth 3500 (4500 - 1000) have been used and are recorded as an expense and deducted from the supplies account.