A company had office supplies costing $50 at 1 July 2015.Purchases during the year amounted to $420 and a stocktake at 30 June 2016 disclosed supplies valued at $90.What is the amount to be debited to supplies expense account at 30 June 2016?

Question

Quizplus · Accepted Answer

The amount to be debited to supplies expense account at 30 June 2016 can be found by calculating the cost of supplies used during the year. 
Cost of supplies used during the year = Beginning inventory + Purchases - Ending inventory
Beginning inventory = $50
Purchases = $420
Ending inventory = $90
Cost of supplies used during the year = $50 + $420 - $90 = $380
Therefore, the amount to be debited to supplies expense account at 30 June 2016 is $380, which is option B.

A Company Had Office Supplies Costing $50 at 1 July