Question

For each separate case below, follow the three-step process for adjusting the Supplies asset account at December 31. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2 Assume no other adjusting entries are made during the year, a. The Supplies account has a $460 debit balance to start the year. No supplies were purchased during the current year. A December 31 physical count shows $190 of supplies remaining. Supplies Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal Step 3. Record the December 31, adjusting entry to get from step 1 to step 2 b. The Supplies account has an $1,200 debit balance to start the year. Supplies of $2,900 were purchased during the current year and debited to the Supplies account. A December 31 physical count shows $850 of supplies remaining. Supplies < Prev 13 of 23 Next

Answer 1

a)

Step 1	Determine what the current account balance equals	460	Debit
Step 2	Determine what the current account should equal	190	Debit
Adjusting entry
Date	Details	Dr.$	Cr.$
31-Dec	Supplies Expense Acc Dr.	270
	Supplies		270

Working notes

Supplies Account
Date	Details	$	Date	Details	$
	Balance b/d	460		Supplies Expense	270
				Balance c/d	190
		460			460

b)

Step 1	Determine what the current account balance equals	4100	Debit
Step 2	Determine what the current account should equal	850	Debit
Adjusting entry
Date	Details	Dr.$	Cr.$
31-Dec	Supplies Expense Acc Dr.	3250
	Supplies		3250
	Working notes
Supplies Account
Date	Details	$	Date	Details	$
	Balance b/d	1200		Supplies Expense	3250
	Bank	2900
				Balance c/d	850
		4100			4100

c)

Step 1	Determine what the current account balance equals	15800	Debit
Step 2	Determine what the current account should equal	3140	Debit
Adjusting entry
Date	Details	Dr.$	Cr.$
31-Dec	Supplies Expense Acc Dr.	12660
	Supplies		12660
Working notes
Supplies Account
Date	Details	$	Date	Details	$
	Balance b/d	4800		Supplies Expense	12660
	Bank	11000
				Balance c/d	3140
		15800			15800