Question

Kolts Corporation had $2,400 in supplies on hand at the beginning of December. During the month, supplies purchased amounted to $4,400, but by the end of the month the supplies on hand were only $3,200. What is the appropriate month-end adjusting entry?

Answer 1

Kolts Corporation's supplies expense for December is calculated by subtracting the ending supplies on hand from the total of the beginning balance and purchases. The supplies expense is $3,600, which is recorded as a debit to Supplies Expense and a credit to Supplies in the adjusting journal entry.

Step-by-step explanation:

The question pertains to the calculation of the expense related to supplies for Kolts Corporation for the month of December. To ascertain the expense, we compare the beginning and ending balances of supplies on hand and account for new purchases. Kolts Corporation began December with $2,400 in supplies and purchased an additional $4,400 throughout the month. By the end of December, the supplies on hand amounted to $3,200. To determine the supplies expense, we calculate the difference between the beginning balance plus purchases and the ending balance. This calculation is as follows:

($2,400 + $4,400) - $3,200 = $3,600

The appropriate month-end adjusting entry to record the supplies expense would be a debit to supplies expense for $3,600 and a credit to supplies for $3,600.

Journal Entry:

Supplies Expense ………… Debit $3,600
Supplies ……………………… Credit $3,600