On january 1st, NetSolutions had a debit balance of $1,250.00 in the Office Supplies account. During the month, Netsolutions purchased $245.00 and $610.00 of office supplies and journalized them to the office supplies asse account upon purchasing. On January 31st an inspection of the office supplies cabinet shows that only $810.00 of office supplies remains in the locker. Write the january 31st entry for office supplies in the space beloe.
I am lost because of the additional expense, and if you have $1250.00 at the beginning and $810 at the end with purchasing additional supplies, this does not add up to me, can someone help me, please!!!
To determine the January 31st entry for the Office Supplies account, we need to consider the transactions that took place during the month and the remaining balance. Let's break it down step by step:
1. On January 1st, NetSolutions had a debit balance of $1,250.00 in the Office Supplies account.
2. During the month, NetSolutions made two purchases of office supplies:
- Purchased $245.00 of office supplies
- Purchased $610.00 of office supplies
These purchases need to be journalized to the Office Supplies account. To do this, we need to add the amounts of the purchases to the existing balance.
Existing balance (January 1st): $1,250.00
Add: $245.00
Add: $610.00
Total: $2,105.00
The balance in the Office Supplies account after adding the purchases is $2,105.00.
3. On January 31st, an inspection of the office supplies cabinet shows that only $810.00 of office supplies remains in the locker. This means that $1,295.00 worth of office supplies were used or consumed during the month.
To update the Office Supplies account with the remaining balance, we need to deduct the amount used from the previous total.
Previous total balance: $2,105.00
Deduct: $1,295.00 (remaining office supplies)
New balance: $810.00
Therefore, the January 31st entry for the Office Supplies account would be as follows:
Date: January 31st
Account: Office Supplies
Debit: $1,295.00 (to account for the used office supplies)
Credit: $1,295.00 (to balance the entry)
This entry reflects the usage of $1,295.00 worth of office supplies throughout the month, leaving a remaining balance of $810.00 in the Office Supplies account.
Based on the information provided, here is the January 31st entry for office supplies:
Debit:
Office Supplies Expense: $445.00 ($245.00 + $610.00 - $810.00)
Credit:
Office Supplies: $445.00
Explanation:
Since the ending balance of office supplies is only $810.00, it means that $440.00 ($1250.00 - $810.00) worth of office supplies was used up during the month. To record this expense, we need to debit the Office Supplies Expense account. At the same time, we credit the Office Supplies account with the same amount to decrease its balance. Hence, the entry is the Office Supplies Expense account debited for $445.00 and the Office Supplies account credited for $445.00.