A company purchased supplies during the year totaling $20,000.At the end of the year,they made an adjusting entry to record $15,000 of supplies that had been used during the year.The ending balance in the Supplies account after the adjustment was $12,000.The beginning balance in the Supplies account was:

Question

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The supplies purchased during the year were $20,000 and $15,000 of supplies were used during the year, which means that $5,000 worth of supplies are still available at the end of the year. Therefore, the beginning balance in the Supplies account must have been $7,000 ($5,000 + $12,000).

A Company Purchased Supplies During the Year Totaling $20,000