The asset account,Supplies,has a balance of $700 on January 1.During January,the company purchased $16,000 of supplies on account and the liability was appropriately recorded.A count of supplies at the end of January indicates a balance of $900.Which one of the following is a correct amount to be reported on the company's financial statements for the month ending January 31?

Question

Quizplus · Accepted Answer

The correct amount to be reported as Supplies Expense is $15,800. This is calculated by starting with the initial supplies balance of $700, adding purchases of $16,000 to get a total of $16,700, and then subtracting the ending supplies balance of $900. The calculation is $16,700 (total supplies available) - $900 (ending balance) = $15,800 used during the month.

The Asset Account,Supplies,has a Balance of $700 on January 1