Question

BE4-4 Lahey Advertising Company's trial balance at December 31 shows Supplies $8,800 and Supplies Expense $0. On December 31, there are $1,100 of supplies on hand. Prepare the adjusting entry at December 31 and, using T-accounts, enter the balances in the accounts, post the adjusting entry, and indicate the adjusted balance in each account.

Answer 1

See explanation

Step-by-step explanation:

Journal Entry (Adjusting)

Debit Supplies expense $7,700

Credit Supplies $7,700

Note: Supplies on hand means at the end of the year, as supplies at hand $1,100, it means the supplies expense = $(8,800 - 1,100) = $7,700.

T-Accounts of supplies and supplies expenses are given in an image: