Question

On January 1st, Williams Company began the year with $200 worth of supplies, and during the year, purchased $800 worth of supplies on account. On December 31st, the fiscal year end, it is determined that $500 dollars of supplies have been used up. What is the balance in the supplies account after adjustment

Answer 1

$500

Step-by-step explanation:

Supplies account is a current asset and has a normal debt balance. It is shown on the assets side of the balance sheet under the sub-head 'current assets'.

Given,

Opening balance = $200

Purchased supplies = $800

Supplies used = $500

Closing balance = Opening balance + Purchased supplies - Supplies used

Closing balance = $200 + $800 - $500

Closing balance = $500