Exercise 2: Complete the following adjusting entries. Assume all adjusting entries are made on 12/31, the fiscal year end. a. Supplies: The balance in the SUPPLIES account before adjustment is $5,875. The physical count at 12/31 shows an actual balance of $1,870. SUPPLIES 5,875 12/31 1,870 SUPPLIES EXPENSE reported on the Income Statement?: SUPPLIES reported on the Balance Sheet?: 12/31 b. Prepaid Insurance: The balance before adjustment was $12,375, which includes payment for additional insurance premiums during the year. This exercise states the same reality in two different ways: a) assume the amount of insurance expired during the year is $6,075, b) assume the unexpired insurance applicable to future periods is $6,300. 12/31 PREPAID INSURANCE 12,375 INSURANCE EXPENSE reported on the Income Statement?: PREPAID INSURANCE reported on the Balance Sheet?: 12/31