Dreamtime Laundry purchased $7,000 worth of supplies on June 2 and recorded the purchase as an asset. On June 30, an inventory of the supplies indicated only $2,000 on hand. The adjusting entry that should be made by the company on June 30 isa. Debit Supplies Expense, $2,000; Credit Supplies, $2,000.b. Debit Supplies, $2,000; Credit Supplies Expense, $2,000.c. Debit Supplies, $5,000; Credit Supplies Expense, $5,000.d. Debit Supplies Expense, $5,000; Credit Supplies, $5,000
Accepted Solution
A:
Answer:The correct option is D.Step-by-step explanation:Given information:On June 2 : Dreamtime Laundry purchased $7,000 worth of supplies.On June 30 : An inventory of the supplies indicated only $2,000 on hand.The adjusted amount is[tex]\$7,000-\$2,000=\$5,000[/tex]To adjust the amount we need to debit Supplies Expense by $5000 and credit Supplies by $5,000.So, the required adjusting entry that should be made by the company on June 30 isSupplies Expense $5,000 Credit Supplies $5,000Therefore, the correct option is D.