Textbook Problem

The Supplies account has a $1,400 balance. A physical inventory is taken at the end of the fiscal year, and the amount on hand is determined to be $300. What adjusting entry is required to record the supplies used?

1. a. Supplies 300 DR, Cash 300 CR
2. b. Supplies Expense 1,400 DR, Supplies 1,400 CR
3. c. Supplies 1,100 DR, Supplies Expense 1,100 CR
4. d. Supplies Expense 1,100 DR, Supplies 1,100 CR
5. e. None of the above