Question

a. The Supplies account has a $320 debit balance to start the year. No supplies were purchased during the current year. A December 31 physical count shows $120 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

Solution:

a. The supplies account has a $320 debit balance to start the year. No supplies were purchased during the current year. At Decemebr 31 physical count shows $120 of supplies remaining.
			Supplies
Step 1: Determine what the current account balance equals.	$320	Debit	$320
				$200
Step 1: Determine what the current account balance should equal.	$120	Debit	$120
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2
Supplies expense Dr	$200
To Supplies		$200
b. The supplies account has a $850 debit balance to start the year. Supplies of $2200 were purchased during the current year and debit to Supplies account. At Decemebr 31 physical count shows $675 of supplies remaining.
			Supplies
Step 1: Determine what the current account balance equals.	$3,050	Debit	$3,050
				$2,375
Step 2: Determine what the current account balance should equal.	$675	Debit	$675
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2
Supplies expense Dr	$2,375
To Supplies		$2,375
c. The supplies account has a $4100 debit balance to start the year. During the current year, Supplies of $9600 were purchased and debit to Supplies account. The inventory of supplies available at December 31 totaled $2720.
			Supplies
Step 1: Determine what the current account balance equals.	$13,700	Debit	$13,700
				$10,980
Step 2: Determine what the current account balance should equal.	$2,720	Debit	$2,720
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2
Supplies expense Dr	$10,980
To Supplies		$10,980