Office Supplies was $1,800 at the end of January and $2,280 at the end of February.During February,Office Supplies Expense equaled $560.How much cash was paid for office supplies during February?

Question

Quizplus · Accepted Answer

Office Supplies Expense for February includes both the supplies used during February and any supplies that were previously purchased but not used until February. We need to figure out how much of the increase in Office Supplies from January to February is due to the actual purchase of supplies during February.

To do this, we subtract the increase in Office Supplies from January to February that is not due to the February purchase of supplies:
$2,280 end of February balance - $1,800 end of January balance = $480 increase in Office Supplies
$480 increase in Office Supplies - $560 Office Supplies Expense = -$80
The negative $80 result means that $80 of the increase in Office Supplies from January to February was due to previously purchased supplies being used up during February, and so the actual purchase of new supplies during February was:
$560 Office Supplies Expense - $80 supplies used from January purchases = $480 cash paid for new supplies during February.

Therefore, the answer is (D) $1,040.

Office Supplies Was $1,800 at the End of January and $2,280