Adjusting Entries for Supplies Expense

Exercise 2

On December 1, 20x1, Entity B purchased $4,500 supplies and recorded as an asset. On December 31, 20x1, Entity B checked supplies and found $1,200 in the inventory. Prepare journal entries on the following dates:

December 1, 20x1

Supplies

4,500

   Cash

4,500

December 31, 20x1

Supplies expense

3,300

   Supplies

3,300

[Note]

Supplies consumed during December = $4,500 - $1,200 = $3,300

Exercise 3

On December 1, 20x1, Entity C purchased $3,000 supplies and recorded as supplies expense.

On December 31, 20x1, Entity C checked supplies and found $1,000 in inventory. Prepare journal entries on the following dates:

December 1, 20x1

Supplies expense

4,500

   Cash

4,500

December 31, 20x1

Debit

Credit

Supplies

1,200

   Supplies expense

1,200

[Note]

Supplies left in the inventory at December 31, 20x1 = $1,200