The balance in the supplies account on June 1 was $5000 supplies purchased during June were $3000 and the supplies on hand at June 30 were $3500. The amount to be used for the appropriate adjusting entry is
A) $4000.
B) $4500.
C) $6500.
D) $11500.

Question

Quizplus · Accepted Answer

The supplies account needs to be adjusted to reflect the actual supplies on hand as of June 30. Therefore, the amount of supplies used during the month (which equals the supplies purchased minus the supplies on hand at the end of the month) needs to be added to the supplies expense account and subtracted from the supplies account.

Supplies used = $3000 (purchased) - $3500 (on hand) = -$500 (a negative amount indicates that supplies were not used up completely)
Adjusting entry: 
Supplies expense  $500 
Supplies          $500

When this adjusting entry is made, the balance in the supplies account will be $4500 ($5000 beginning balance + $3000 purchased - $3500 on hand - $500 adjusting entry)

The Balance in the Supplies Account on June 1 Was