Speedy Clean Laundry purchased $6,500 worth of laundry supplies on June 2 and re

Question

Speedy Clean Laundry purchased $6,500 worth of laundry supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the laundry supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 is Debit Laundry Supplies Expense, $2,000; Credit Laundry Supplies, $2,000. Debit Laundry Supplies Expense, $4,500; Credit Laundry Supplies, $4,500. Debit Laundry Supplies, $2,000; Credit Laundry Supplies Expense, $2,000. Debit Laundry Supplies, $4,500; Credit Laundry Supplies Expense, $4,500.

Explanation / Answer

Difference between June2 and June 30 = $6500 - 2000 = $4500 We have to remove $4500 from the asset. So, We Cr Laundry Supplies $4500. The corresponding entry will be Dr Laundry Supplies Expense $4500 Thus, the answer is Debit Laundry Supplies Expense, $4,500; Credit Laundry Supplies, $4,500 Hope this helps!

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