financial accounting

ACT 200 – U1 Spring 2020

Assignment – Tap 1 (13%)

Name ____________________________________ ID______________________

Exercise 1 (85 points). Electro Company’s trial balance at December 31, 2019 shows Supplies $7,500 and Supplies expense $0. On December 31, there are $4,000 of supplies on hand. Prepare the adjusting entry at December 31 and using the T-accounts, enter the balances in the accounts, post adjusting entry, and indicate the adjusted balance in each account.

a) Preparing adjusting entries at December 31

b) Post adjusting entries in T-accounts.

Exercise 2 (15 points).

Please describe the purpose of adjusting entries. Why companies need to prepare adjusting

entries and how often?

Bonus question (10 points).

The balance in the supplies account on June 1 was $5,200, supplies purchased during June were $3,500, and the supplies on hand at June 30 were $2,000. The amount to be used for the appropriate adjusting entry is a. $5,500. b. $3,500. c. $10,700. d. $6,700.