The Vintage Laundry Company purchased $8500 worth of laundry supplies on June 2 and recorded the purchase as an asset.On June 30 an inventory of the laundry supplies indicated only $1500 on hand.The adjustment that should be made by the company on June 30 is:

Question

Quizplus · Accepted Answer

The company initially recorded the entire purchase as an asset. By June 30, only $1500 worth of supplies remained, meaning $7000 worth of supplies were used. Therefore, Supplies Expense should be increased by $7000, and Supplies should be decreased by $7000 to reflect the usage.

The Vintage Laundry Company Purchased $8500 Worth of Laundry Supplies