A company started the year with $3,750 of supplies on hand.During the year the company purchased additional supplies of $2,000 and recorded them as an increase to the supplies asset.At the end of the year the company determined that only $750 of supplies are still on hand.What is the adjusting journal entry to be made at the end of the period?
A)Debit Supplies Expense and credit Supplies for $5,000
B)Debit Supplies and credit Supplies Expense for $750
C)Debit Supplies Expense and credit Supplies for $3,000
D)Debit Supplies and credit Supplies Expense for $2,500

Question

Quizplus · Accepted Answer

Supplies expense (used)= Beginning balance + Supplies purchased − Supplies on hand at end of period
= $3,750 + $2,000 − $750 = $5,000
The adjusting journal entry to record the use of supplies would include a debit to Supplies Expense and a credit to Supplies for $5,000,which is the amount of supplies used during the period.

A Company Started the Year with $3,750 of Supplies on Hand.During