Question

Bonita Laundry purchased $7100 worth of supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the supplies indicated only $1010 on hand. The adjusting entry that should be made by the company on June 30 is

Debit Supplies, $6090; Credit Supplies Expense, $6090.

Debit Supplies Expense, $1010; Credit Supplies, $1010.

Debit Supplies, $1010; Credit Supplies Expense, $1010.

Debit Supplies Expense, $6090; Credit Supplies, $6090.

Answer 1

Total supplies expense=Purchase of supplies-Ending supplies on hand

=(7100-1010)=$6090

Hence journal entry:

Supplies expense....Dr$6090

To Supplies $6090

Hence supplies expense increase and are debited while supplies balance(assets) are credited(decreased).

Hence the correct option is:

Debit Supplies Expense, $6090; Credit Supplies, $6090.