Ideas Company prepares monthly financial statements. On June 30, the balance in the Office Supplies account was \(\$ 400\). During July, \(\$ 740\) of supplies were purchased and debited to Office Supplies Expense.

a. Prepare an adjusting journal entry on July 31 to account for the supplies, assuming a July 31 inventory of supplies showed that \(\$ 325\) of supplies were on hand.

b. Prepare an adjusting journal entry on July 31 to account for the supplies, assuming a July 31 inventory of supplies showed that \(\$ 500\) of supplies were on hand.