Reese Ltd purchased office supplies costing $4 000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1 600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be: Group of answer choices Debit Office Supplies Expense, $1,600; Credit Office Supplies, $1,600. Debit Office Supplies, $2,400; Credit Office Supplies Expense, $2,400. Debit Office Supplies Expense, $2,400; Credit Office Supplies, $2,400. Debit Office Supplies, $1,600; Credit Office Supplies Expense, $1,600.
Question
Reese Ltd purchased office supplies costing 1 600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be: Group of answer choices
Debit Office Supplies Expense, 1,600.
Debit Office Supplies, 2,400.
Debit Office Supplies Expense, 2,400.
Debit Office Supplies, 1,600.
Solution
Reese Ltd initially debited the full amount of 1,600 still on hand. This means that $2,400 worth of supplies have been used.
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The used supplies should be recorded as an expense. Therefore, Office Supplies Expense should be debited.
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The remaining supplies are still an asset, but the Office Supplies account needs to be reduced by the amount that has been used. Therefore, Office Supplies should be credited.
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The amount of the adjustment should be the cost of the supplies that have been used, which is $2,400.
Therefore, the appropriate adjusting journal entry to be made at the end of the period would be:
Debit Office Supplies Expense, 2,400.
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