Question

This fact pattern provides information needed to answer Q#17-Q#21. Year 1 Transactions: On May 31, Year 1, Merle bought $14,000 of supplies on account on the day the firm was founded. This was the only purchase of supplies in Year 1. Later in Year 1, the firm returned defective supplies valued at $4,000 to the supplier. The cost of the supplies returned was deducted from Merle's account payable. At the end of Year 1, Merle's employees conducted a physical count of supplies on hand determining the remaining supplies to be worth $2,000. On December 31, Year 1, Merle made payments to the firm's suppliers for Click Save and Submit to save and submit. Click Save All Answers to save all answers Save Al so 888 * $ 4 % 5 & 7 & 옥 a 8 E R T Y U 1 o D F H J K C V B N M

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Answer 1

Supplies expense in Year 2 = Supplies in hand at the end of Year 1 + Supplies purchases in Year 2 - Supplies in hand at the end of Year 2
Supplies expense in Year 2 = $2,000 + ($5,000 + $8,000) - $2,500
Supplies expense in Year 2 = $2,000 + $13,000 - $2,500
Supplies expense in Year 2 = $12,500