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29 July, 08:48

If Bojana Tax Services' office supplies account balance on March 1 was $1,100, the company purchased $1,000 of supplies during the month, and a physical count of supplies on hand at the end of March indicated $1,200 unused, what is the amount of the adjusting entry for office supplies on March 31?

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  1. 29 July, 11:28
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    Dr. Office Supplies Expense $900

    Cr. Office supplies $900

    Explanation:

    At the end of the period office supplies account requires an adjusting entry of the office supplies used during the period. It can be calculated as follow

    Ending balance of Office supplies = Beginning balance of Office supplies + Purchases during the period - office supplies expense during the period

    $1,200 = $1,100 + $1,000 - office supplies expense during the period

    $1,200 = $2,100 - office supplies expense during the period

    Office supplies expense during the period = $2,100 - $1,200

    Office supplies expense during the period = $900

    Journal Entry will be debited to office supplies expense account and credit to office supplies inventory account, which will increase the expenses and decrease the inventory.
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