Supplies - ABC begins the period with $1,000 of supplies. They purchase $500 of

Question

Supplies - ABC begins the period with $1,000 of supplies. They purchase $500 of supplies during the period. At the end of the period they have $200 of supplies remain ing. Record the purchase of supplies and the adjusting entry at the end of the period. Insurance - ABC purchases a one-year insurance policy on November 1 for $12,000 Record the purchase on November 1st and the adjusting entry on December 31st Depreciation - ABC purchases a machine on January 1 for $10,000. The machine's useful life is 10 years. Record the purchase on January 1st and the adjusting entry on December 31st.

Explanation / Answer

1st situation:

note:supplies expense = beginning balance + purchases - ending balance

=>1,000 + 500 - 200

=>$1,300

the following are the journal entries:

2nd situation:

3rd situation:

sno accounts debit credit 1 Supplies a/c 500 .................To Cash a/c 500 (assuming supplies are purchased for cash) 2 Supplies expense a/c 1,300 .................To Supplies a/c 1,300 (amount as calculated in note above)

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