Question

I know the Insurance and Depreciation will be the same number as below but what will the Adjustment for Supplies?

Step 10: Enter the December adjusting entries for the month of Decem- ber for Morrow Consulting: Insurance expired during December. $85.00 Inventory of supplies on December 31.. December 31............................. $1,178.50 Depreciation on office equipment for December ............. $423.00 ...........................

Answer 1

For making an adjustment for supplies we must have complete details such as -

1) Inventory of supplies on January 1 (i.e. beginning inventory)

2) Purchase of supplies during the year

3) Inventory of supplies on December 31 (i.e. ending inventory) - given in question

Formula for recording adjusting entry for supplies (i.e. for recording supplies expense for the year) is -

Inventory of supplies on January 1 _______ xxxxx

Add: Purchase of supplies during the year _ xxxxx

Total inventory of supplies available______ xxxxx

Less: Inventory of supplies on December 31 xxxxx

Supplies Expense for the year_________ xxxxx

Hence, the adjusting entry would be as follows -

Supplies Expense xxx

Supplies xxx