GreenSource Company began the period with $330 in supplies. During the month, an additional $1,500 of supplies were purchased. A physical inventory at the end of the period revealed that there were $585 of supplies on hand. The adjusting entry should include a

Question

Quintin Cabrera

Business

19 April, 22:37

GreenSource Company began the period with $330 in supplies. During the month, an additional $1,500 of supplies were purchased. A physical inventory at the end of the period revealed that there were $585 of supplies on hand. The adjusting entry should include a

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Nia Patrick · Answer 1

Debit Supplies expense account (P/L) $1,245

Credit Supplies account (B/S) $1,245

Explanation:

The adjustment required is for the supplies used up during the period.

This can be determined by the net movement in the supplies account considering the opening balance, the purchases or additions and the closing balance.

Supplies used up = $330 + $1,500 - $585

= $1,245

The adjusting entries required is

Debit Supplies expense account (P/L) $1,245

Credit Supplies account (B/S) $1,245

Being entries to recognize supplies used up during the period