Question

Monty Corp.’s trial balance at December 31 shows Supplies $5,700 and Supplies Expense $0. On December 31, there are $2,600 of supplies on hand. Prepare the adjusting entry at December 31, and using T-accounts, enter the balances in the accounts, post the adjusting entry, and indicate the adjusted balance in each account. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)

Answer 1

Explanation:

The adjusting entry is shown below:

On December 31

Supplies expense A/c Dr $3,100

             To supplies A/c $3,100

(Being supplies account is adjusted)  

The supplies expense is computed by  

= Supplies balance - supplies on hand  

= $5,700 - $2,600

= $3,100

Now the T- accounts are as follows

                                                   Supplies

Beginning balance          $5,700              Supplies Expense $3,100

                                                                   Ending balance     $2,600

                                        Supplies expense

Supplies                           $3,100

                                                                     Ending balance    $3,100