Sheldon Company began Year 1 with $1200 in its supplies account. During the year, the company...

Sheldon Company began Year 1 with $1200 in its supplies account. During the year, the company purchased $3500 of supplies on account. The company paid $2100 on accounts payable by year end. At the end of Year 1, Sheldon counted $1900 of supplies on hand. Sheldon's financial statements for Year 1 would show: $2600 of supplies; $3500 of supplies expense $1900 of supplies; $2800 of supplies expense $1900 of supplies; $1600 of supplies expense $2600 of supplies; $700 of supplies expense

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Expert Solution

Opening Supplies = $ 1200
Add: Purchase During the Year   = $ 3500
Less: Closing Stock                         = ($ 1900)
_______________________________________
Sales                                                   = $ 2600

Therefor in financial Statement Shall record Supplies $ 2600

As per Accrual Concept of Accounting Expense should record at Paid or Recored whichever is earlier

Supplies Purchase = $ 3500 There for Supplier expense = $ 3500

Payment of $ 2100 for last year supplies it was due in last year

there for in financil year 1 supplies expense = $ 3500

There for Supplies = $ 2600 and supplies expense = $ 3500 is correct answer.

ekkarill92 answered 1 year ago

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