Q 7SE-2 - Horngren'S Financial And Managerial Accounting

Question

On November 1, Carlisle Equipment had a beginning balance in the Office Supplies account of \(600. During the month, Carlisle purchased \)2,300 of office supplies. At November 30, Carlisle Equipment had $500 of office supplies on hand. Requirements 1. Open the Office Supplies T-account, and enter the beginning balance and purchase of office supplies. 2. Record the adjusting entry required at November 30. 3. Post the adjusting entry to the two accounts involved, and show their balances at November 30.

Step-by-Step Solution

Answer

Adjusting entries are as follows:

Date	Accounts and Explanation	Debit	Credit
Nov.30	Supplies Expense	$2,400
	Office Supplies		$2,400
	To record supplies expense

Step-by-Step Solution Step 1: Explanation on Journal Entry

The office supplies expense will be recorded by debiting office supplies expense and crediting office supplies account by $2,400, respectively.

Step 2: Calculation of Office Supplies Used

Office Supplies Used is calculated as follows:

$$\begin{gathered} \mathbf{OfficeSuppliesUsed}\mathbf{=}\mathbf{OfficeSuppliesBalanceBeforeAdjustment}-\mathbf{OfficeSuppliesonHand} \\ \mathbf{=}\mathbf{\$}\mathbf{2}\mathbf{,}\mathbf{900}-\mathbf{\$}\mathbf{500} \\ \mathbf{=}\mathbf{\$}\mathbf{2}\mathbf{,}\mathbf{400} \end{gathered}$$