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Chapter 3: Q 7SE-2 (page 158)

On November 1, Carlisle Equipment had a beginning balance in the Office Supplies account of \(600. During the month, Carlisle purchased \)2,300 of office supplies. At November 30, Carlisle Equipment had $500 of office supplies on hand. Requirements 1. Open the Office Supplies T-account, and enter the beginning balance and purchase of office supplies. 2. Record the adjusting entry required at November 30. 3. Post the adjusting entry to the two accounts involved, and show their balances at November 30.

Short Answer

Expert verified

Adjusting entries are as follows:

Date

Accounts and Explanation

Debit

Credit

Nov.30

Supplies Expense

$2,400

Office Supplies

$2,400

To record supplies expense

Step by step solution

01

Step-by-Step SolutionStep 1: Explanation on Journal Entry

The office supplies expense will be recorded by debiting office supplies expense and crediting office supplies account by $2,400, respectively.

02

Calculation of Office Supplies Used

Office Supplies Used is calculated as follows:

OfficeSuppliesUsed=OfficeSuppliesBalanceBeforeAdjustment-OfficeSuppliesonHand=$2,900-$500=$2,400

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Most popular questions from this chapter

Under the matching principle, when are expenses recorded?

Question :The following data at July 31, 2018, are given for RCO: a. Depreciation, \(600. b. Prepaid rent expires, \)200. c. Interest expense accrued, \(700. d. Employee salaries owed for Monday through Thursday of a five-day workweek; weekly payroll, \)8,000. Unearned revenue earned, \(1,000. f. Office supplies used, \)150. Requirements 1. Journalize the adjusting entries needed on July 31, 2018. 2. Suppose the adjustments made in Requirement 1 were not made. Compute the overall overstatement or understatement of net income as a result of the omission of these adjustments

Question :Laughter Landscaping has collected the following data for the December 31 adjusting entries: a. Each Friday, Laughter pays employees for the current week’s work. The amount of the weekly payroll is \(8,000 for a five-day workweek. This year, December 31 falls on a Tuesday. Laughter will pay its employees on January 3. b. On January 1 of the current year, Laughter purchases an insurance policy that covers two years, \)8,000.c. The beginning balance of Office Supplies was \(4,300. During the year, Laughter purchased office supplies for \)5,600, and at December 31 the office supplies on hand total \(1,500. d. During December, Laughter designed a landscape plan and the client prepaid \)6,500. Laughter recorded this amount as Unearned Revenue. The job will take several months to complete, and Laughter estimates that the company has earned 40% of the total revenue during the current year. e. At December 31, Laughter had earned \(3,000 for landscape services completed for Turnkey Appliances. Turnkey has stated that it will pay Laughter on January 10. f. Depreciation for the current year includes Equipment, \)3,000; and Trucks, \(2,200. g. Laughter has incurred \)250 of interest expense on a $550 interest payment due on January 15. Requirements 1. Journalize the adjusting entry needed on December 31 for each of the previous items affecting Laughter Landscaping. Assume Laughter records adjusting entries only at the end of the year. 2. Journalize the subsequent journal entries for adjusting entries a, d, and g.

On October 1, Orlando Gold Exchange paid cash of $57,600 for computers that are expected to remain useful for three years. At the end of three years, the value of the computers is expected to be zero. Requirements 1. Calculate the amount of depreciation for the month of October using the straightline depreciation method. 2. Record the adjusting entry for depreciation on October 31. 3. Post the purchase of October 1 and the depreciation on October 31 to T-accounts for the following accounts: Computer Equipment, Accumulated Depreciation— Computer Equipment, and Depreciation Expense—Computer Equipment. Show their balances at October 31. 4. What is the computer equipment’s book value on October 31?

Question :In the recording of depreciation expense, which account is credited?
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