Adjustment for Prepaid Expense The supplies account had a beginning balance of $3,690 and was debited for $1,700 for supplies purchased during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of supplies on hand is $1,290.

Question

Makenzie Chan

Business

23 January, 19:14

Adjustment for Prepaid Expense The supplies account had a beginning balance of $3,690 and was debited for $1,700 for supplies purchased during the year. Journalize the adjusting entry required at the end of the year, assuming the amount of supplies on hand is $1,290.

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Zayne Compton · Answer 1

Dr supplies expense $4,100

Cr supplies $4,100

Explanation:

Supplies used in the year needs to be ascertained before any adjusting entry can be posted.

Supplies used=beginning supplies+purchases-ending supplies

beginning supplies is $3,690

purchases of supplies was $1,700

ending balance of supplies was $1,290

supplies used=$3,690+$1,700-$1,290=$ 4,100.00

The used portion of supplies would be debited to supplies expense while supplies inventory is credited with the same amount.