On January 1, 20X2, the ledger of Global Corporation correctly showed supplies inventory of $500. During 20X2, supplies purchases amounted to $700. A count (inventory) of supplies on hand at December 31, 20X2, showed $400. The 20X2 statement of earnings should report supplies expense amounting to which of the following?
A) $700.
B) $800.
C) $1,100.
D) $1,200.

Question

Quizplus · Accepted Answer

The supplies expense for the year is calculated as the beginning inventory plus purchases minus the ending inventory. Therefore, the calculation is $500 (beginning inventory) + $700 (purchases) - $400 (ending inventory) = $800.

On January 1, 20X2, the Ledger of Global Corporation Correctly