Answer:
The March 31 adjusting journal entry should include a:
Work In Progress Account $ 1,400 (debit)
Inventories/ Supplies $ 200 (credit)
Cash $1,200 (credit)
Explanation:
When Minutemen purchased supplies of $1,200:
Inventories/ Supplies $ 1,200 (debit)
Cash $1,200 (credit)
When Minutemen used supplies of $1,400 :
Work In Progress Account $ 1,400 (debit)
Inventories/Supplies $1,400 (credit)
Combined Journal
Work In Progress Account $ 1,400 (debit)
Inventories/ Supplies $ 200 (credit)
Cash $1,200 (credit)
Answer:
Debit Supplies expense $1,400
Credit Supplies account $1,400
Explanation:
The change in supplies account balance at the start of a period and at the end of the period is as a result of 2 factors namely; use and purchases.
While use will result in a decrease in the account balance, purchases will cause an increase. Hence when a purchase is made, debit supplies account credit cash/accounts payable, when supplies are used, credit supplies and debit supplies expense.
This may be expressed mathematically as
Opening balance + purchases - use = closing balance
$500 + $1,200 - $1,400 = closing supplies account balance
closing supplies account balance = $300
Adjusting entries required,
Debit Supplies expense $1,400
Credit Supplies account $1,400
