Offi ce Supplies Somerville Corp. purchases offi ce supplies once a month and prepares monthly fi nancial statements. The asset account Offi ce Supplies on Hand has a balance of $1,450 on May 1. Purchases of supplies during May amount to $1,100. Supplies on hand at May 31 amount to $920. Identify and analyze the effect of the adjustment on May 31.

What will be the effect on net income for May if this adjustment is not recorded?

AppendixLO1