[minilight1020]

I'm confused how to adjust this entry so that it will balance for debit/credit.

The problem is:

An inventory count shows that teaching supplies costing $3,000 are available at year-end 2009.

Please help me.

[morgaine300]

The amount you have at the end of the year is the amount that needs to be in the supplies account as a balance. When supplies are used, they become an expense. (Assets that are consumed become expenses.) But we don't expense it every time we pull out a pack of paper. Rather, we just count how much we have left at the end of the period, and the difference between that and what was in the account is the portion that got used. So if you had $10,000 total in that account and you have $3000 left now, then you used $7000 of it up. So the $7000 would need to be removed from the supplies and expensed.

(That's the asset-first typical way of doing it. If you have nothing in supplies, it might be an expense-first method, in which case, check back.)