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Determine supplies purchased based on adjusting entries?
I don't even know how to begin to answer this as there is no information or example of this kind of problem in the normal chapter. I wonder if I simply don't understand the question that is being asked here.
The supplies and the supplies expense accounts at December 31, after adjusting entries have been posted at the end of the first year of operations, are shown in the following T accounts:
_____SUPPLIES_____ Bal. 279| ____SUPPLIES EXPENSE____ Bal. 1,261| Determine the amount of supplies purchased during the year. Thank you. |
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How many supplies were purchased during the year?
The formula is as follows: Beginning Inventory + Purchases – What you sold (aka Supplies Expense) = Ending Inventory Beginning Inventory = 0 (b/c this is its first year, meaning they just started) Purchases = we are trying ti find that out Supplies Expense = 1,261 Ending Inventory = 279 0 + Purchases – 1261 = 279 Purchases = 1,540 |
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