Question

 For each separate case below, follow the three-step process for adjusting the Supplies asset account at December 31.

 Step 1: Determine what the current account balance equals.

 Step 2: Determine what the current account balance should equal.

 Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.

 Assume no other adjusting entries are made during the year.

Answer 1

Part A

				Supplies
			DR or CR?
Step:1	Determine what the current account balance equals.	700	DR	700
					390
Step: 2	Determine what the current account balance should equal.	310	DR	310
Step:3	Record the December 31, adjusting entry to get from step 1 to step 2.
Adjusting entry	Debit	Credit
Supplies expense (700-310)	390
Supplies		390

Part B

				Supplies
			DR or CR?
Step:1	Determine what the current account balance equals.	1800	DR	1800
				4100	4750
Step: 2	Determine what the current account balance should equal.	1150	DR	1150
Step:3	Record the December 31, adjusting entry to get from step 1 to step 2.
Adjusting entry	Debit	Credit
Supplies expense (1800+4100-1150)	4750
Supplies		4750

Part C

				Supplies
			DR or CR?
Step:1	Determine what the current account balance equals.	6000	DR	6000
				13400	15540
Step: 2	Determine what the current account balance should equal.	3860	DR	3860
Step:3	Record the December 31, adjusting entry to get from step 1 to step 2.
Adjusting entry	Debit	Credit
Supplies expense (6000+13400-3860)	15540
Supplies		15540