Question

Question 18 The balance in the supplies account on June 1 was $5370, supplies purchased during June were $3540, and the supplies on hand at June 30 were $3090. The amount to be used for the appropriate adjusting entry is O $6630. O $3540. $5820. O $12000.

Answer 1

We will find supplies used using the following formula

beginning supplies+purchase-supplies used = ending supplies on hand

$5,370+$3,540-$supplies used = $3,090

Supplies used = $5,370+$3,540-$3,090

=$5,820

so adjusting entry to record supplies used would be $5,820

Supplies expense would be debited and supplies would be credited

ANswer C) $5,820

2) stock holder's equity = Retained earnings at the beginning +Net income during the year-dividend + Common stock

Net income
service revenue	$134,800
less:
supplies expense	$6,100
salaries and wages	$31,700
Rent expense	$17,300
Insurance expense	$3,000
Depreciation expense	$12,000
Advertising expense	$20,900
Net income	$43,800[$134,800-6,100-31,700-17,300-3,000-12,000-20,900]

Retained earnings at the end = $55,400+$43,800-$14,100

=$85,100

Stock holder's equity = $85,100+$42,400

=$127,500

Answer D

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