Question

During the first year of Wilkinson Co.'s operations, all purchases were recorded as assets. Supplies in the amount of $25,800 were purchased. Actual year-end supplies amounted to $5,600. The adjusting entry for store supplies will:_____

Answer 1

The adjusting entry for store supplies will be made to reflect the difference between the actual year-end supplies and the recorded amount of supplies purchased throughout the year. In this case, $25,800 in supplies were initially recorded as assets, but the actual year-end supplies amount to $5,600. The adjusting entry would be: Debit Store Supplies Expense: $20,200 and Credit Store Supplies: $20,200.

Step-by-step explanation:

The adjusting entry for store supplies will be made to reflect the difference between the actual year-end supplies and the recorded amount of supplies purchased throughout the year.

In this case, $25,800 in supplies were initially recorded as assets, but the actual year-end supplies amount to $5,600. Therefore, an adjusting entry needs to be made to decrease the recorded amount of supplies by $20,200 ($25,800 - $5,600).

The adjusting entry would be:

• Debit Store Supplies Expense: $20,200
• Credit Store Supplies: $20,200