Question

Frank Corporation purchased supplies at a cost of $15,000 during 2016. At January 1, 2016, supplies on hand were $2,000. At December 31, 2016, supplies on hand are $2,500. Calculate supplies expense for 2016.

a. $ 14,500
b. $ 17,000
c. $ 15,500
d. $ 15,000

Answer 1

The supplies expense for Frank Corporation for 2016 is calculated by adding the beginning supplies and purchased supplies, then subtracting the ending supplies, which equals $14,500.

Step-by-step explanation:

To calculate the supplies expense for Frank Corporation for 2016, we will use the following information:

• Purchase of supplies during 2016: $15,000
• Supplies on hand at January 1, 2016: $2,000
• Supplies on hand at December 31, 2016: $2,500

Now, let's compute the supplies expense:

Supplies Expense = Beginning Supplies + Purchased Supplies - Ending Supplies

Supplies Expense = $2,000 + $15,000 - $2,500

Supplies Expense = $17,000 - $2,500

Supplies Expense = $14,500

Therefore, the correct answer is a. $14,500.