Question

Ragland Corp. purchases supplies on account for $1,000 and appropriately records the transaction in an asset account. A count of inventory at year-end indicates that $300 of supplies are remaining. The adjusting journal entry required at year-end includes:_____.

Answer 1

Answer and Explanation:

The adjusting entry is shown below:

Supplies Expense A/c $700

           To Supplies A/c $700

(Being the supplies expense is recorded)

The supplies expense is computed below

= Supplies purchased made - supplies on hand  

= $1,000 - $300

= $700

For recording this we debited the supplies expense as it increased the expenses and credited the supplies as it decreased the assets