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7 June, 05:00

Supplies on financial statements Yard Professionals Inc. experienced the following events in 2016, its first year of operation: 1. Performed services for S35,000 cash. 2. Purchased $6,000 of supplies on account. 3. A physical count on December 31, 2016, found that there was $1,800 of supplies on hand. Required: Based on this information alone: a. Record the events under an accounting equation. b. Prepare an income statement, balance sheet, and statement of cash flows for the 2016 accounting period. c. What is the balance in the Supplies account as of January 1, 2017? d. What is the balance in the Supplies Expense account as of January 1, 2017?

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  1. 7 June, 07:49
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    cash 35,000 debit

    service revenue 35,000 credit

    supplies 6,000 debit

    accounts payable 6,000 credit

    supplies expense 4,200 debit

    suplies 4,200 credit

    b)

    service revenue 35,000

    supplies expense (4,200)

    income 30,800

    cash flow:

    35,000 generated from operating activities

    balance sheet:

    cash 35,000

    supplies 1,800

    total assets 36,800

    liaiblities 6,000 A/P

    equity 30,800

    c) supplies account: 1,800

    6,000 - 4,200 = 1,800 It matches the inventory at hand as accounting represent reality

    d) supplies expense: 0

    expenses and revenue are temporary account are closed at year-end

    Explanation:

    a)

    year-end adjustment for the consumption of supplies:

    6,000 - 1,800 = 4,200
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Home » Business » Supplies on financial statements Yard Professionals Inc. experienced the following events in 2016, its first year of operation: 1. Performed services for S35,000 cash. 2. Purchased $6,000 of supplies on account. 3.
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