I have a problem in writing journal entry. A company given in the problem prepared a summary of its activities at the end of its first quarter. The transaction is narrated like this: 'service suppliers purchased for use in the business, $32.520 cash, of which $6504 were unused ( still on hand ) at the end of the quarter.' My question is that how can I write the journal entry for this transaction?? I'll wait your response

The original entry is:

Service supplies 32,520
Cash 32,520

The adjusting entry would be:

Service supplies expense 26016
Service Supplies 26016

When you do your T accounts you will see that you have $6504 worth of supplies on hand

Yes Tural I agree with Purdue2010

Dr . Service supplies 32.520
Cr . Cash 32.520

When supplies used
Dr . Service Supplies Expense 26016
Cr . Service Supplies 26016

On hand if you want to record

Dr . Service supplies 6504
Cr . Cash 6504

Like Purdue mentioned, create the T-Account for Service Supplies, you will find out how much of beginning, used, or on hand (left over)
Hope this helps.

Sorry. Originally when I posted the quick answer for this question I indented the credits column, but I did not check to see if it would post that way. For future reference I will label it dr. & cr. Thanks Teon for helping me realize my blunder.

Oh no problem Purdue, I did not mean to fix you , I based on your answer to clarify it little more , and hope it helps Tural. It also happened to me once when I tried to post Journals in the form of Dr-Cr, but it did not show properly.. We're here to learn and help each others.. Good Luck Purdue

Quote:

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Originally Posted by teonguyen

Dr . Service supplies 6504
Cr . Cash 6504

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This entry doesn't exist. There isn't any 6504 in cash - there's no relationship of the amount of supplies being left and cash. (And cash is never used in adjusting entries.)