During Bisbee's first year of business, office supplies were purchased for cash in the amount of $5,600 and the amount was debited to Supplies Expense. At the end of the first year, the physical count indicated that $425 of supplies were unused. How much should be reported on the income statement at year end for supplies expense?

Question

Quizplus · Accepted Answer

The supplies expense should be adjusted for the value of supplies that were unused, which is $425. Therefore, the amount of supplies expense reported on the income statement at year end should be $5,600 - $425 = $5,175.

During Bisbee's First Year of Business, Office Supplies Were Purchased