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

Answer 1

a.

Step 1 Current account balance equals $580.

Step 2 Current account balance should equal $250.

Step 3: Entry to get from Step 1 to Step 2 is

Supplies Expense Dr 330

Supplies 330

(To supplies expensed)

b.

Step 1 Current account balance equals $5,000.

Step 2 Current account balance should equal $1,000.

Step 3: Entry to get from Step 1 to Step 2 is

Supplies Expense Dr 4,000

Supplies 4,000

(To supplies expensed)

c.

Step 1 Current account balance equals $3,500.

Step 2 Current account balance should equal $3,500.

Step 3: Entry to get from Step 1 to Step 2 is

No entry required.