(L.O. 10) The Office Supplies on Hand account had a balance at the beginning of year 3 of

$1,600. Payments for acquisitions of office supplies during year 3 amounted to $10,000 and were recorded as expense. A physical count at the end of year 3 revealed supplies costing $1,900 were on hand. Reversing entries are used by this company. The required adjusting entry at the end of year 3 will include a debit to:

a. Office Supplies Expense for $300.

b. Office Supplies on Hand for $300.

c. Office Supplies Expense for $9,700.

d. Office Supplies on Hand for $1,900.

Approach and Explanation: Draw T-accounts. Enter the data given and solve for the adjusting entry.

Compare each alternative answer to the adjusting entry you have sketched in the accounts. (Solution = d.)

Transcribed Image Text:

Office Supplies Expense Reversing 1,600 Acqstns. 10,000 1,900 Ending Bal. 9,700 ENTRY NEEDED TO COMPLETE ACCOUNTS Office Supplies on Hand Beg. Bal. 1,600 1,900 Reversing 1,600 Desired End- ing Bal. 1,900