Question

The Blossom Company purchased $10030 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $1770 on hand. The adjusting entry that should be made by the company on June 30 is:

Answer 1

The journal entry to record the purchase of the laundry supplies

June 2, laundry supplies purchased

Dr Laundry supplies inventory 10,030

Cr Cash or accounts payable 10,030

June 30, adjusting entry to record laundry expenses

Dr Laundry expenses 8,260

Cr Laundry supplies inventory 8,260

The initial inventory of laundry supplies is $10,030 and if at the end of the month only $1,770 worth of supplies are left, it means that $8,260 (= $10,030 - $1,770) were used.