Pinecrest Physio Inc. bought 700 of supplies during November (its first supplies). A count at 30 November finds 250 on hand. Record the adjusting entry.
Pinecrest Physio Inc. bought 700 of supplies during November (its first supplies). A count at 30 November finds 250 on hand. Record the adjusting entry.
Answer
Dr Supplies Expense 450; Cr Supplies 450
Accounts - Supplies Expense - Supplies - Accounts Payable - Cash Available 700, on hand 250, **used 450**. **Supplies Expense** (debit) and **Supplies** (credit) 450, leaving the asset at the 250 counted. Crediting Supplies for 250 is the trap; Cash and Accounts Payable belong to the purchase, not the adjustment.
Hermanson Vol 1 ch 3 (effects of failing to adjust; the demonstration problem); Hermanson Vol 1 ch 4 (statements from the adjusted trial balance); Dauderis & Annand §3.2–3.4 (concept map D13–D15)