The supplies account has a balance of $1,200 at the beginning of the year and was debited during the year for $2,300, representing the total of supplies purchased during the year. If $650 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is Group of answer choices

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Business

Andrea

25 February, 20:28

The supplies account has a balance of $1,200 at the beginning of the year and was debited during the year for $2,300, representing the total of supplies purchased during the year. If $650 of supplies are on hand at the end of the year, the supplies expense to be reported on the income statement for the year is Group of answer choices

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Jack Fitzpatrick · Answer 1

Supplies expense to be recorded = $2,850

Explanation:

Beginning account balance = $1,200

debit during the year = $2,300. This means that a transaction of $2,300 was used for supply purchase during the year

balance on hand = $650

difference between beginning and ending inventory = 1200 - 650 = $550

This means that an expense of $550 was carried out during the year.

Therefore, total expense during year = 550 + purchase expense

= 550 + 2300 = $2,580

Alternatively, the supply expense reported can be calculated with the formula:

Supplies expense = beginning inventory + supplies purchased - ending inventory

Supplies expense = 1200 + 2300 - 650 = $2,850