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Murphy Tri-State Interiors Company's Accounting Records Included the Following Analysis

Question 205

Multiple Choice

Murphy Tri-State Interiors Company's accounting records included the following analysis:  Assets = Liabilities + Stockholders’ Equity\begin{array}{llcc} \underline{\text { Assets } } &= & \underline{\text { Liabilities }} &+\underline{ \text { Stockholders' Equity} }\end{array}

Bal.Dec. 31Adj. Bal. Supplies =8,5007,5001,000commonStockRevenue Expense07,5007,500 Div. \begin{array}{c}\begin{array}{lll}\\\\\text {Bal.}\\\hline \text {Dec. 31}\\\hline \text {Adj. Bal.}\\\hline \end{array}\begin{array}{l}\\\underline{\text { Supplies }}=\\8,500 \\\hline-7,500 \\\hline 1,000\\\hline\end{array}\begin{array}{c}\text {common}\\ \underline{\text {Stock}}\\\\\hline\\\hline\\\hline\end{array}\begin{array}{l}\\\underline{\text {Revenue }} -\\\\\hline\\\hline\\\hline \end{array}\begin{array}{lll}\\\underline{\text {Expense}} - \\-0 \\\hline -7,500 \\\hline -7,500 \\\hline\end{array}\begin{array}{lll}\\\underline{\text { Div. }}\\\\\hline\\\hline\\\hline \end{array}\end{array}
What transaction does this tabular analysis show?


A) The purchase of supplies for $8500
B) An adjusting entry to expense supplies used of $7500
C) An adjusting entry to decrease the Supplies account balance for supplies used of $1000
D) The purchase of supplies for $7500

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