n its 1st year of business, Daily Grind, Inc. purchased $1,000 of supplies of which it only has $300 left at the end of the period. Which of the following will be found in the year-end financial statements? (Select all that apply.)Multiple select question.Supplies on the balance sheet of $700Supplies Expense on the income statement of $1,300Supplies Expense on the income statement of $700Supplies on the balance sheet of $300
Question
n its 1st year of business, Daily Grind, Inc. purchased 300 left at the end of the period. Which of the following will be found in the year-end financial statements? (Select all that apply.)Multiple select question.Supplies on the balance sheet of 1,300Supplies Expense on the income statement of 300
Solution
The correct answers are:
- Supplies Expense on the income statement of $700
- Supplies on the balance sheet of $300
Here's why:
The company started with 300. This means that it used 700) is the Supplies Expense and will be reported on the income statement.
The remaining supplies of $300 will be reported as Supplies on the balance sheet. This is because the balance sheet reports the company's assets, and the unused supplies are considered an asset.
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