86 SOLID FOOTING Problem 7-3 Purchasing Supplies and the Monthly Supplies Adjusting Entry On July 1, 2023, Martha Jones started Martha's Auto Repair Shop, Inc. On that same day, Martha purchased the following supplies for use in the repair shop: Item Shop Towels Degreasing Fluid Gasket Sealer Unit of Measure Rolls Quarts Tubes Quantity Purchased 120 75 40 Item Shop Towels Degreasing Fluid Gasket Sealer Chapter 7- Adjusting Entries Item Shop Towels Degreasing Fluid Gasket Sealer Price per Unit $4 On July 1, Martha paid cash for the supplies and set the accounting policy that all supplies would initially be recorded in the Supplies asset account. Quarts Tubes $9 $6 At the end of July, Martha counted the supplies that were left and prepared the following listing: Unit of Measure Quantity Remaining Rolls 80 Quarts 65 Tubes ▷ Cash ▷ Supplies ▷ Supplies Expense 32 At the end of August, Martha counted the supplies that were left and prepared the following listing: Unit of Measure Rolls Extended Total Cost Quantity Remaining 55 $480 $675 $240 Total $1,395 48 22 The following is a partial list of the accounts in Martha's General Ledger. These are the only accounts you need for this problem. Use the forms on Tabs 7-3 A and 7-3 B in the Excel workbook Chapter 07 c - Problem 7-1 to 7-8 Forms to complete this problem.

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hapter 7 - Adjusting Entries
roblem 7-3 (continued)
equirement 1
Prepare the General Journal entry to record the purchase of the supplies on July 1.
Requirement 2
Calculate the dollar amount of supplies on-hand as of July 31.
Requirement 3
Prepare a "T" account analysis to determine the required July 31 adjustment to the Supplies
account.
Requirement 4
Prepare the July 31 General Journal supplies adjusting entry.
SOLID FOOTING 87
Requirement 5
Calculate the dollar amount of supplies on-hand as of August 31.
Requirement 6
Prepare a "T" account analysis to determine the required August 31 adjustment to the Supplies
account.
Requirement 7
Prepare the August 31 General Journal supplies adjusting entry.
Requirement 8
What was the total dollar amount of supplies consumed during Martha's first two months of
operation?
Transcribed Image Text:hapter 7 - Adjusting Entries roblem 7-3 (continued) equirement 1 Prepare the General Journal entry to record the purchase of the supplies on July 1. Requirement 2 Calculate the dollar amount of supplies on-hand as of July 31. Requirement 3 Prepare a "T" account analysis to determine the required July 31 adjustment to the Supplies account. Requirement 4 Prepare the July 31 General Journal supplies adjusting entry. SOLID FOOTING 87 Requirement 5 Calculate the dollar amount of supplies on-hand as of August 31. Requirement 6 Prepare a "T" account analysis to determine the required August 31 adjustment to the Supplies account. Requirement 7 Prepare the August 31 General Journal supplies adjusting entry. Requirement 8 What was the total dollar amount of supplies consumed during Martha's first two months of operation?
86 SOLID FOOTING
Problem 7-3 Purchasing Supplies and the Monthly Supplies Adjusting Entry
On July 1, 2023, Martha Jones started Martha's Auto Repair Shop, Inc. On that same day, Martha
purchased the following supplies for use in the repair shop:
Item
Shop Towels
Degreasing Fluid
Gasket Sealer
Unit of
Measure
Rolls
Quarts
Tubes
Item
Shop Towels
Degreasing Fluid
Gasket Sealer
Quantity
Purchased
120
75
40
Item
Shop Towels
Degreasing Fluid
Gasket Sealer
Chapter 7 - Adjusting Entries
Price per
Unit
$4
Quarts
Tubes
$9
$6
On July 1, Martha paid cash for the supplies and set the accounting policy that all supplies would
initially be recorded in the Supplies asset account.
At the end of July, Martha counted the supplies that were left and prepared the following listing:
Unit of
Measure
Quantity
Remaining
Rolls
80
Quarts
65
Tubes
32
▷ Cash
▷ Supplies
▷ Supplies Expense
Extended
Total Cost
$480
At the end of August, Martha counted the supplies that were left and prepared the following listing:
Unit of
Measure
Rolls
$675
$240
Total $1,395
Quantity
Remaining
55
48
22
The following is a partial list of the accounts in Martha's General Ledger. These are the only
accounts you need for this problem.
Use the forms on Tabs 7-3 A and 7-3 B in the Excel workbook Chapter 07 c - Problem 7-1 to
7-8 Forms to complete this problem.
Transcribed Image Text:86 SOLID FOOTING Problem 7-3 Purchasing Supplies and the Monthly Supplies Adjusting Entry On July 1, 2023, Martha Jones started Martha's Auto Repair Shop, Inc. On that same day, Martha purchased the following supplies for use in the repair shop: Item Shop Towels Degreasing Fluid Gasket Sealer Unit of Measure Rolls Quarts Tubes Item Shop Towels Degreasing Fluid Gasket Sealer Quantity Purchased 120 75 40 Item Shop Towels Degreasing Fluid Gasket Sealer Chapter 7 - Adjusting Entries Price per Unit $4 Quarts Tubes $9 $6 On July 1, Martha paid cash for the supplies and set the accounting policy that all supplies would initially be recorded in the Supplies asset account. At the end of July, Martha counted the supplies that were left and prepared the following listing: Unit of Measure Quantity Remaining Rolls 80 Quarts 65 Tubes 32 ▷ Cash ▷ Supplies ▷ Supplies Expense Extended Total Cost $480 At the end of August, Martha counted the supplies that were left and prepared the following listing: Unit of Measure Rolls $675 $240 Total $1,395 Quantity Remaining 55 48 22 The following is a partial list of the accounts in Martha's General Ledger. These are the only accounts you need for this problem. Use the forms on Tabs 7-3 A and 7-3 B in the Excel workbook Chapter 07 c - Problem 7-1 to 7-8 Forms to complete this problem.
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