At March 31, the amount of supplies on hand is $520. What amount is reported in the January income statement for supplies expense?

Question

Quizplus · Accepted Answer

To determine the amount reported in the January income statement for supplies expense, we need to consider the cost of supplies used during the period. Assuming that supplies are being used evenly over the course of the year, we can calculate the cost per month as follows:
(cost of supplies - beginning inventory) / number of months = monthly cost
($1,300 - $0) / 12 = $108.33
Therefore, the cost of supplies used in January would be $108.33. Since the ending inventory at March 31 was $520, this means that we had $780 worth of supplies that were used during January, February, and March. Thus, the answer is D ($780).

At March 31, the Amount of Supplies on Hand Is