Question

During the first year of Wilkinson Co.'s operations, all purchases were recorded as assets. Supplies in the amount of $28,800 were purchased. Actual year-end supplies amounted to $6,600. The adjusting entry for store supplies will

Answer 1

Answer:

The expense account will be increased by $22,200

Explanation:

During the first year, all purchases were recorded as assets instead of expenses(supplies). This means asset account have been overstated while expenses account have been understated.

The adjusting entry will be

Supplies purchased - Actual year-end supplies

$28,800 - $6,600

$22,200.

The expense account will be increased by $22,200