Question

In the month of June 2020, Softie Limited Company did a physical count of its supplies inventory. The paperwork has been received in the accounting department, and the physical count figure was compared to the number in the books. The physical count revealed that $19,210 worth of supplies that has been used up during the current period. What adjusting entry should be recorded to show the $19,210 of supplies have been used during the period?

Answer 1

To record the supplies that have been used during the period, you need to make an adjusting journal entry that reflects the reduction in supplies inventory and the corresponding expense. The entry would involve debiting the Supplies Expense account and crediting the Supplies Inventory account.

The adjusting journal entry would be as follows:

Journal Entry:

• Debit Supplies Expense: $19,210
• Credit Supplies Inventory: $19,210

This entry recognizes the consumption of the supplies during the period and adjusts the supplies inventory account to reflect the actual amount on hand after the consumption has been accounted for.