Question

During the first year of Sheffield Corp.'s operations, all purchases were recorded as assets. Supplies in the amount of $28000 were purchased. Actual year-end supplies amounted to $7100. The adjusting entry for store supplies will

Answer 1

Answer:

$20,900

Explanation:

This $20,900 will be recorded as Supplies Expense, which will decrease Net Income because expenses will increase by $20,900. and  Inventory will  be decreased by $20,900

Supplies used = $28,000 – $7,100 = $20,900

Entry

Dr     Supplies Expense    $20,900

Cr      Inventory                  $20,900