Question

Adjusting Entry for Supplies

The balance in the supplies account, before adjustment at the end of the year, is $1,418.

Journalize the adjusting entry required if the amount of supplies on hand at the end of the year is $666.

Answer 1

Solution

Date	General Journal	Debit	Credit
31-Dec	Supplies expense	$        752.00
	Supplies		$             752.00
	(To record Supplies expense)

If supplies balance decreased from 1418 to 666 then it means (1418-666=752) $752 worth of supplies are used and should be recorded as expense.

The recording of expense will include a credit to supplies so that supplies balance may reduce to $666.