Question

On September 1, Jenkins Company purchased $2,520 of supplies on account. By the end of the calendar year, $2,000 of supplies remains. Required: 1. How much has been expensed by the end of the year? 2. How much will be in the Supplies account at the end of the year, after the adjusting entries have been prepared and posted?

Answer 1

Answer:

1. The amount expensed by the end of the year is $520.
2. The balance in the supplies account at the end of the year, after the adjusting entries have been prepared and posted is $2,000.

Explanation:

To calculate the amount of supplies that was expensed, we simply deduct the closing balance of $2,000 from the opening balance of $2,520, as follows: $2,520 - $2,000 = $520. So, the amount of $520 was expensed during the year and the appropriate entries recorded will be:

Debit Supplies expense $520

Credit Supplies $520

(To record the amount of supplies expensed)