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A company started the year with $3,750 of supplies on hand. During the year the company purchased additional supplies of $2,000 and recorded them as an increase to the supplies asset. At the end of the year the company determined that only $750 of supplies are still on hand. What is the adjusting journal entry to be made at the end of the period?

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Answer:

Explanation:

The adjusting journal entry is as follows:

Supplies expense A/c Dr $5,000

     To Supplies A/c $5,000

(Being supplies account is adjusted)

The supplies expense is computed below:

= Supplies balance +  purchased additional supplies - supplies still on hand

= $3,750 + $2,000 - $750

= $5,000

In order to record this above entry, we debited the supplies expense account and credited the supplies account

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