Answer :
Answer:
Debit Supplies expense account (P/L) $1,245
Credit Supplies account (B/S) $1,245
Explanation:
The adjustment required is for the supplies used up during the period.
This can be determined by the net movement in the supplies account considering the opening balance, the purchases or additions and the closing balance.
Supplies used up = $330 + $1,500 - $585
= $1,245
The adjusting entries required is
Debit Supplies expense account (P/L) $1,245
Credit Supplies account (B/S) $1,245
Being entries to recognize supplies used up during the period
Answer:
A) credit to Supplies for $1,245.
Explanation:
Beginning inventory $330
+ purchases $1,500
- ending inventory $585
total supplies consumed $1,245
The adjusting entry should include a credit to supply inventory, since it is an asset account and it decreases. Since supplies are not usually considered production costs, they are treated as expenses (generally administrative expenses). All expenses are debited.
The complete adjusting entry should be:
End of period date, adjusting entry for consumed supplies.
Dr Supplies expense 1,245
Cr Supplies 1,245