Ace Advertising Agency has the following information regarding supplies. The beginning balance in the general ledger account Supplies on August 1 was $214.00. On August 13 the agency purchased $302.00 worth of supplies. On August 26 it purchased additional supplies for $176.00. At the end of August, Ace counted the supplies and determined that supplies worth $273.00 were still on hand. 

Instructions

Analyze the preceding information and then answer the following questions regarding the Supplies account.

1. What amount should be entered in the Trial Balance section of the work sheet for Supplies? Which column should be used?

2. What amount should be entered in the Adjustments section of the work sheet for Supplies? Which column should be used?

3. Should any other amount be entered in the Adjustments section? If yes, answer these questions:

a. Which account?

b. Which column?

c. What amount?

4. What amounts should be entered in the Adjusted Trial Balance section? For each amount list the name of the account and specify which column should be used (Debit or Credit).