The balance in the office supplies account on January 1 was

The balance in the office supplies account on January 1 was $17,000, supplies purchased during January were $8,000, and the supplies on hand at January 30 were $4,000. The amount to be used for the appropriate adjusting entry is 2. Which of the following is the proper adjusting entry, based on a prepaid insurance account balance before adjustment of $18,000 and unexpired insurance of $6,000, for the fiscal year ending on April 30? 3.

Solution

Answer:2)

office supplies expense
      = Beginning Supplies + Supplies during the period - Ending Supplies
      = $17,000 + $8,000 - $4,000

= $21,000

Adjustment Entry

   Office Supplies Expenses A/c Dr. $21,000

  To Office Supplies A/c Cr. $21,000   

Answer:3)

  Adjustment Entry  

    Insurance Expenses A/c Dr. $12,000

  To Prepaid Insurance A/c Cr. $12,000