Canadian Law

1 . When Ann Litigate purchased $1,000 worth of stationery and supplies for the office, she recorded the purchases in the asset account Office Supplies (130) . At the end of the year, she calculated the value of her office supply stock as $350 . (LO2) a . What must Ann do to correctly reflect the accrued assets and expenses over the course of the past three months?

b . Calculate the value of the office supplies used during the period . c . Which accounts need to be adjusted to record the office supplies used? d . If Ann does not make the necessary adjustment to her books, which account will be overstated and which will be understated?

e . How would failure to make the adjustment affect: i .

the income statement? ii . the balance sheet?

2 . What is the relationship between the adjusted trial balance and the income statement, balance sheet, and statement of owner's equity? (LO3)