The supplies account has a balance of $1,200 at the beginning of the year and was debited during the year for $2,300, representing the total of supplies purchased during the year. If $650 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is Group of answer choices

Question

Conrad Liu

Business

3 August, 18:13

The supplies account has a balance of $1,200 at the beginning of the year and was debited during the year for $2,300, representing the total of supplies purchased during the year. If $650 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is Group of answer choices

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Booth · Answer 1

Supplies expense to be recorded = $2,850

Explanation:

Beginning account balance = $1,200

debit during the year = $2,300. This means that a transaction of $2,300 was used for supply purchase during the year

balance on hand = $650

difference between beginning and ending inventory = 1200 - 650 = $550

This means that an expense of $550 was carried out during the year.

Therefore, total expense during year = 550 + purchase expense

= 550 + 2300 = $2,580

Alternatively, the supply expense reported can be calculated with the formula:

Supplies expense = beginning inventory + supplies purchased - ending inventory

Supplies expense = 1200 + 2300 - 650 = $2,850