Question

At December 31, 2018, you obtained the following data relating to supplies. Unadjusted balance in Supplies on December 31, 2018 $ 1,813 Unadjusted balance in Supplies Expense on December 31, 2018 7,271 Supplies on hand, counted on December 31, 2018 310 What amount should be reported on the 2018 income statement as Supplies Expense?

Answer 1

The supplies expense to be reported on Income Statement for 2018 is $8774

Step-by-step explanation:

To calculate the supplies expense, we first need to adjust the balance in the supplies account by deducting the supplies expense that has not been deducted yet. This can be calculated by taking the difference between the supplies balance in supplies account and the supplies on hand balance at 31 December 2018.

Supplies expense yet to be adjusted = 1813 - 310 = $1503

This expense will be recorded to the supplies account and will increase the balance of supplies expense account to:

Supplies expense adjusted = 7271 + 1503 = $8774