A tabular summary of transactions for Skysong, Inc. before adjustments includes

Question

A tabular summary of transactions for Skysong, Inc. before adjustments includes the following selected account information Assets Liabilities + Stockholders' Equity Com Stock Rev. (Supplies) Dv Exp. Supplies = Bal 9,400 On December 31, there is $1,200 of supplies on hand. Record the adjustment for supplies in the tabular summary and indicate the adjusted balance in each account. transaction results in a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for Assets Liabilities + Stockholders' Equity Com. Stock Exp, (Supplies) Supplies Rev. Bal. Dec. 31 Adj. Bal. 9,400 8200

Explanation / Answer

Solution :- Journal entry (for recording the supplies on hand)

Supplies expense A/c Dr.

To Supplies A/c

1200

1200

Explanation :- In the tabular summary given in question, Balance of Supplies will decrease by $ 1200. Adjusted balance of supplies will be $ 8200 (9400 - 1200). On the other hand, Stockholders' equity will decrease by $ 1200 due to fall in the net income of Skysong Inc. as a result of supplies expense showing on the debit side of profit and loss account.

Date General journal Debit ($) Credit ($) Dec. 31

Supplies expense A/c Dr.

To Supplies A/c

1200

1200

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