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. a. The Supplies account has a $580 debit balance to start the year. No supplies were purchased during the current year. A December 31 physical count shows $250 of supplies remaining. Supplies 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.

Answer 1

step 1 : determine what the current account balance equals						580
step 2 : determine what the current account balance should equal						250
Supplies
unadjusted		580
			adjustment	330
31-Dec		250
Step 3
Date	particulars		debit	credit
31-Dec	supplies expenses		330
	supplies			330
b)
step 1 : determine what the current account balance equals						5000
step 2 : determine what the current account balance should equal						1000
Supplies
unadjusted		5000
			adjustment	4000
31-Dec		1000
Step 3
Date	particulars		debit	credit
31-Dec	supplies expenses		4000
	supplies			4000
c)
step 1 : determine what the current account balance equals						17600
step 2 : determine what the current account balance should equal						3500
Supplies
unadjusted		17600
			adjustment	14100
31-Dec		3500
Step 3
Date	particulars		debit	credit
31-Dec	supplies expenses		14100
	supplies			14100