Question

At the beginning of the​ month, supplies were $ 3,500. During the​ month, $ 5, 000 of supplies were purchased. At​ month's end, 1,500 of supplies are still on hand.
1. What is the bullet adjusting​ entry?
2. What is the bullet ending balance in the Supplies​ account?

Answer 1

Explanation:

1. The adjusting entry is as follows:

Supplies expense A/c Dr $7,000

          To Supplies A/c $7,000

(Being supplies account is adjusted)

The supplies expense is computed below:

= Supplies opening balance + purchase of supplies - supplies are still on  hand

= $3,500 + $5,000 - $1,500

= $7,000

2. The ending balance in the supplies account is $1,500 only which are still on hand.