ADJUSTMENT FOR SUPPLIES Pain-Free Dental Group, Inc., purchased dental supplies of $15,500 during the year. At the end of the year, a physical count of supplies showed $2,300 of supplies on hand.

Required:

. Prepare the adjusting entry needed at the end of year.

. What is the amount of supplies reported on Pain-Free’s balance sheet at the end of the year and supplies expense reported on the income statement?

Cornerstone Exercise