Question

If Bojana Tax Services' office supplies account balance on March 1 was $1,100, the company purchased $1,000 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,200 unused, what is the amount of the adjusting entry for office supplies on March 31?

Answer 1

Answer:

Dr.  Office Supplies Expense $900

Cr.  Office supplies                 $900

Explanation:

At the end of the period office supplies account requires an adjusting entry of the office supplies used during the period. It can be calculated as follow

Ending balance of Office supplies = Beginning balance of Office supplies + Purchases  during the period - office supplies expense during the period

$1,200 = $1,100 + $1,000 - office supplies expense during the period

$1,200 = $2,100 - office supplies expense during the period

Office supplies expense during the period = $2,100 - $1,200

Office supplies expense during the period = $900

Journal Entry will be debited to office supplies expense account and credit to office supplies inventory account, which will increase the expenses and decrease the inventory.