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Chapter 3: Q 7SE-2 (page 158)

On November 1, Carlisle Equipment had a beginning balance in the Office Supplies account of \(600. During the month, Carlisle purchased \)2,300 of office supplies. At November 30, Carlisle Equipment had $500 of office supplies on hand. Requirements 1. Open the Office Supplies T-account, and enter the beginning balance and purchase of office supplies. 2. Record the adjusting entry required at November 30. 3. Post the adjusting entry to the two accounts involved, and show their balances at November 30.

Short Answer

Expert verified

Adjusting entries are as follows:

Date

Accounts and Explanation

Debit

Credit

Nov.30

Supplies Expense

$2,400

Office Supplies

$2,400

To record supplies expense

Step by step solution

01

Step-by-Step SolutionStep 1: Explanation on Journal Entry

The office supplies expense will be recorded by debiting office supplies expense and crediting office supplies account by $2,400, respectively.

02

Calculation of Office Supplies Used

Office Supplies Used is calculated as follows:

OfficeSuppliesUsed=OfficeSuppliesBalanceBeforeAdjustment-OfficeSuppliesonHand=$2,900-$500=$2,400

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Most popular questions from this chapter

Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130

What are the two rules to remember about adjusting entries?

Identify the impact on the income statement and balance sheet if adjusting entries for the following situations were not recorded. a. Office Supplies used, \(800. b. Accrued service revenue, \)4,000. c. Depreciation on building, \(3,500. d. Prepaid Insurance expired, \)650. e. Accrued salaries expense, \(2,750. f. Service revenue that was collected in advance has now been earned, \)130

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