Question

Adjustment for Prepaid Expense The supplies account had a beginning balance of $5,010 and was debited for $2,150 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 $2,720.

Answer 1

Solution

Date	General Journal	Debit	Credit
31-Dec	Supplies expense	$    4,440.00
	Supplies		$          4,440.00
	(To record supplies expense)

Working

Supplies at beginning	$        5,010.00
Supplies purchased	$        2,150.00
Total supplies available for use	$        7,160.00
Less: Supplies in the end of year	$        2,720.00
Supplies used and charged as expense	$        4,440.00