Problem

(L.OBJ. 4) Preparing adjusting entries [10-15 min] At the beginning of the year, suppli...

(L.OBJ. 4) Preparing adjusting entries [10-15 min]

At the beginning of the year, supplies of $1,300 were on hand. During the year, Dubuque Air Conditioning Service paid $4,700 for more supplies. At the end of the year, Dubuque has $500 of supplies on hand.

Requirements

1. Assume that Dubuque records supplies by initially debiting an asset account. Therefore, place the beginning balance in the Supplies T-account, and record the preceding entries directly in the accounts without using a journal.

2. Assume that Dubuque records supplies by initially debiting an expense account. Therefore, place the beginning balance in the Supplies expense T-account, and record the preceding entries directly in the accounts without using a journal.

3. Compare the ending account balances under both approaches. Are they the same?

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