c. Supplies: The Supplies account has a $4,700 debit balance to start the year. During the current year, supplies of $10,800 were purchased and debited to the Supplies account. The inventory of supplies available at December 31 totaled $3,080. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Supplies

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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QS 3-6 (Algo) Prepaid (deferred) expenses adjustments LO P1

For each separate case below, follow the three-step process for adjusting the Supplies asset account at December 31.
 
Step 1: Determine what the current account balance equals. 
Step 2: Determine what the current account balance should equal.
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.
 
Assume no other adjusting entries are made during the year.

c. Supplies: The Supplies account has a $4,700 debit balance to start the year. During the current year, supplies of
$10,800 were purchased and debited to the Supplies account. The inventory of supplies available at December 31 totaled
$3,080.
Step 1: Determine what the current account balance equals.
Step 2: Determine what the current account balance should equal.
Step 3: Record the December 31 adjusting entry to get from step 1 to step 2.
Supplies
Transcribed Image Text:c. Supplies: The Supplies account has a $4,700 debit balance to start the year. During the current year, supplies of $10,800 were purchased and debited to the Supplies account. The inventory of supplies available at December 31 totaled $3,080. Step 1: Determine what the current account balance equals. Step 2: Determine what the current account balance should equal. Step 3: Record the December 31 adjusting entry to get from step 1 to step 2. Supplies
Expert Solution
Step 1: Introduction

Supplies expense refers to the cost of the materials or goods that a company purchases and consumes in its day-to-day operations. These supplies could include things like office supplies, cleaning supplies, fuel for company vehicles, and other items that are necessary to keep the business running. In accounting, supplies expense is recorded as an operating expense on the income statement. This expense is deducted from the company's revenue to calculate its net income.

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