Muldoon Advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year. A year-end physical count shows $2800 in supplies inventory. Which is the appropriate journal entry at year end?

A) Dr Supplies Expense $2,600

Cr Supplies $ 2,600

B) Dr Supplies Expense $2,800

Cr Supplies $ 2,800

C) Dr Supplies $2,600

Cr Supplies Expense $ 2,600

D) Dr Supplies $3,000

Cr Cash $3,000

Question

Gilberto Calhoun

Business

8 February, 15:18

Muldoon Advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year. A year-end physical count shows $2800 in supplies inventory. Which is the appropriate journal entry at year end?

A) Dr Supplies Expense $2,600

Cr Supplies $ 2,600

B) Dr Supplies Expense $2,800

Cr Supplies $ 2,800

C) Dr Supplies $2,600

Cr Supplies Expense $ 2,600

D) Dr Supplies $3,000

Cr Cash $3,000

+5

Answers (1)

Know the Answer?

Layla Case · Answer 1

A) Dr Supplies Expense $2,600

Cr Supplies $ 2,600

Explanation:

The supplies account had an opening balance of $ 2400. Purchases were made of $ 3000 so the total debit balance was $ 5400. The year end showed a debit balance of $ 2800.

So $ 5400 - $ 2800 = $ 2600 Supplies were used and credited.

An expense account would be used to show this so

Supplies Expense is debited with $ 2600 and

Supplies Account is credited with $ 2600 showing a net debit balance of $ 2800 at the end of the year.