Final answer:
The adjusting entry for supplies involves debiting Supplies Expense and crediting Supplies for the value of supplies used during the period to reflect an ending balance of supplies on hand. This assumes the ending balance is $1,038.
Step-by-step explanation:
The student asked what the adjusting entry would be if the amount of supplies on hand at the end of the year is $1,038. This is a question related to accounting, specifically dealing with adjusting entries for supplies. At the beginning of the year, companies typically record the purchase of supplies as a debit to Supplies (an asset account) and a credit to Cash or Accounts Payable. During the year, supplies are consumed, and not all purchased supplies remain at year-end. Therefore, an adjusting entry must be made to reflect the actual amount of supplies still on hand at year-end.To record the adjusting entry, you need to calculate the value of supplies used during the period. If the initial supplies amount is not given, it is assumed in the question that the value of supplies on hand at year-end ($1,038) will be the ending balance in the Supplies account. The adjusting entry involves a debit to the Supplies Expense account for the value of supplies used, and a credit to the Supplies account to decrease it by the same amount, ensuring that the Supplies account reflects the ending balance of supplies on hand ($1,038).If the beginning balance of the Supplies account was higher than $1,038, you would debit Supplies Expense and credit Supplies for the difference, reducing the Supplies account to the correct ending balance of supplies on hand. Conversely, if the beginning balance was less, you would make the opposite adjustment. Without the beginning balance information, only the process, rather than the specific amounts, can be described.