Question

At the beginning of the​ year, office supplies of $1,200 were on hand. During the​ year, Tempo Air Conditioning Service paid $2,000 for more office supplies. At the end of the​ year, Tempo has $1,000 of office supplies on hand.Read the requirements.

Requirement 1. Record the adjusting entry assuming that Tempo records the purchase of office supplies by initially debiting an asset account. Post the adjusting entry to the Office Supplies and Supplies Expense​ T-accounts. Make sure to include the beginning balance and purchase of office supplies in the Office Supplies​ T-account.

Now post the adjusting entry to the Office Supplies and Supplies Expense​ T-accounts. Enter the beginning balances on the first line of each account. Use a ​"Jan. ​1" reference to show the beginning balance. Make sure to include the purchase of office supplies in the Office Supplies​ T-account, then post the adjusting entry. Use a​ "Bal." reference to show the ending balance of each account.

Answer 1

Office Supplies Expenses

The supplies expense for the period is to be calculated by adding supplies purchased during the month and beginning balances of supplies and then deducting from the sum the ending balance of supplies.

Journal Entry

The journal entry to record the supplies expenses is supplies expense is debited as it is an expense which is to be deducted in calculating the net income.The supplies are credited to show the supplies used during a given period.

	Following shows the journal entry
Date	Account Title	Dr Amount	Cr Amount
	Supplies Expense	$2,200
	To office Supplies		$2,200
	to record the office
	supplies used
	Supplies Expenses
	=	Beginning Balance of office supplies + office supplies purchased -Ending Balance of office supplies
		$1200+$2000-$1000
	The journal entry represents the recording of supplies expenses.The supplies expense recorded
	is shown by debiting supplies expenses and crediting office supplies.Supplies expense is debited
	as it an expense which is to be deducted in calculating the net income.The supplies are credited
	to show the supplies used during the given period.The supplies are shown in the BS
	T Accounts
	Following are the T accounts showing the opening balances and djusting entries
	Office Supplies
		Office Supplies
	Balance	$1,200	$2,200	Adjustment
	Adjustment	$2,000
	Balance	$1,000
	The opening balance of office supplies is $1200.The balance is shown on the debit
	side as office supplies is an asset.The supplies are credited to shown the supplies
	used during the given period.The purchase is shown on the debit side.
		Supplies Expense
	Balance	0
	Expense	$2,200
	Balance	$2,200
	The supplies expense recorded is shown by debiting supplies exp and crediting office
	supplies.Supplies expense is debited as it is an expense and shown as deduction
	in calculating net income.