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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

A merchandising company shows $8,842 in the Supplies account on the preadjusted trial balance. After taking inventory of the actual supplies, the company still owns $3,638.

  1. a. How much was used or expired?
  2. b. Write the adjusting entry.

a.

To determine

Find out how much supply was used or expired.

Explanation

Merchandising businesses: Merchandising companies which buy goods from suppliers, or manufacturers, and sell to retailers are referred to as merchandising businesses. These companies act as middlemen between manufacturing and retailing companies.

Supply used or expried = Purchase

b.

To determine

Prepare adjusting entry to record the given adjustment.

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