On April 30,Hilte Corporation performed a month-end inventory and counted office supplies valued at $1,425.On April 1,the balance in the Supplies account was $750.Assuming that $2,900 of purchases for the month was posted to the Supplies account,what adjusting entry would Hilte Corporation make on April 30?

A)$\begin{array} { l l l }
\text { Supplies expense } & 2,225 & \
\quad\text { Supplies } & & 2,225 \
\end{array}$

B) $\begin{array}{lccc}
\text { Supplies } & 2,225 & \
\quad\text { Supplies expense } & & 2,225 \
\end{array}$

C)$\begin{array}{lccc}
\text { Supplies } & 675 & \
\quad\text { Supplies expense } & & 675 \
\end{array}$

D)$\begin{array}{lccc}
\text { Supplies expense } & 675 & \
\quad\text { Supplies } & & 675
\end{array}$
E)None of the above

Question

On April 30,Hilte Corporation performed a month-end inventory and counted office supplies valued at $1,425.On April 1,the balance in the Supplies account was $750.Assuming that $2,900 of purchases for the month was posted to the Supplies account,what adjusting entry would Hilte Corporation make on April 30?

A)$\begin{array} { l l l } 
\text {  Supplies expense } & 2,225 & \
\quad\text { Supplies } & & 2,225 \
\end{array}$

B) $\begin{array}{lccc}
\text { Supplies } & 2,225 & \
\quad\text { Supplies expense } & & 2,225 \
\end{array}$

C)$\begin{array}{lccc}
\text {  Supplies } & 675 & \
\quad\text { Supplies expense } & & 675 \
\end{array}$

D)$\begin{array}{lccc}
\text {  Supplies expense } & 675 & \
\quad\text { Supplies } & & 675
\end{array}$
E)None of the above

Quizplus · Accepted Answer

The adjusting entry should reflect the supplies that were actually used during the month, which can be calculated as follows:

Supplies used = Beginning balance + Purchases - Ending balance
Supplies used = $750 + $2,900 - $1,425
Supplies used = $2,225

Since the Supplies account has a debit balance, we need to credit it to reduce it and recognize the expense. Therefore, the entry should be:

Supplies Expense      2,225
     Supplies                  2,225

On April 30,Hilte Corporation Performed a Month-End Inventory and Counted Supplies expense 2,225 Supplies 2,225\begin{array} { l l l } \text { Supplies expense } & 2,225 & \\\quad\text { Supplies } & & 2,225 \\\end{array} Supplies expense Supplies ​2,225​2,225​

On April 30,Hilte Corporation Performed a Month-End Inventory and Counted $\begin{array} { l l l } \text { Supplies expense } & 2,225 & \\\quad\text { Supplies } & & 2,225 \\\end{array}$