Question

At the beginning of May, Golden Gopher Company reports a balance in Supplies of $500. On May 15, Golden Gopher purchases an additional $3,300 of supplies for cash. By the end of May, only $300 of supplies remains.

(1) Record the purchase of supplies on May 15.
(2) Record the adjusting entry on May 31.
(3) Calculate the balances after adjustment on May 31 of Supplies and Supplies Expense.

Answer 1

Explanation:

The computation and the journal entries are as follows

On May 15

1. Supplies A/c Dr $3,300

           To Cash A/c $3,300

(Being the supplies purchased for cash)

On May 31

2. Supplies expense A/c Dr $3,500

           To Supplies A/c $3,500

(Being supplies account is adjusted)

The supplies expense is computed below

= Supplies balance + purchase of supplies - supplies on hand

= $500 + $3,300 - $300

= $3,500

3. Now the adjusting balance is

For supplies = ending balance = $300

And, the supplies expense is $3,500