A particular company had $2,400 of supplies on hand at January 1. During the year, supplies with a cost of $4,000 were purchased. At December 31, the actual supplies on hand amounted to $2,000. After the adjustments are recorded and posted at December 31, what are the ending balances in the Supplies and Supplies Expense accounts? Supplies Supplies Expense

Question

Quizplus · Accepted Answer

The cost of supplies purchased during the year ($4,000) needs to be added to the beginning balance of supplies on hand ($2,400) to get the total cost of supplies available for use during the year ($6,400). Then, the actual supplies on hand at the end of the year ($2,000) need to be subtracted from this total to get the amount of supplies used during the year ($4,400). This amount is recorded as Supplies Expense. 
Supplies: Beginning balance $2,400 + Purchases $4,000 - Ending balance $2,000 = $4,400 
Supplies Expense: $4,400.

A Particular Company Had $2,400 of Supplies on Hand at January