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13 January, 19:39

On January 1, Year 2, the Supplies account of Sheldon Company had a balance of $1,200. During the year, the company purchased $3,400 of supplies on account and made partial payments totaling $3,000 on those accounts. On December 31, Year 2, Sheldon determined that there were $1,400 of supplies on hand. Which of the following would be reported on Sheldon's Year 2 financial statements?

A.$1,600 of supplies; $200 of supplies expense

B.$1,400 of supplies; $2,000 of supplies expense

C.$1,400 of supplies; $3,200 of supplies expense

D.$1,600 of supplies; $3,400 of supplies expense

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Answers (1)
  1. 13 January, 21:09
    0
    C. $1,400 of supplies; $3,200 of supplies expense

    Explanation:

    The computation of the supplies expense is shown below:

    = Supplies balance + purchase of supplies - supplies on hand

    = $1,200 + $3,400 - $1,400

    = $3,200

    So, the supplies expense would be recorded at $13,200

    And, the supplies on hand for $1,400 should also be reported in the books of accounts.

    The partial payment should not be consider. Hence, ignored it

    Hence, option C is correct.
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