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Chapter 4 Office Supplies - Chapter4 OfficeSupplies(Asset...

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Chapter 4 Office Supplies (Asset) Pages 167 – 168  Office Supplies Recorded as an Asset You purchased office supplies and made the following entry… Date DR. CR. 10/31/0 7 Office Supplies (Asset) $1,000      Cash $1,000 On December 31, you take an inventory of the office supply cabinet,  double check the cost of each item, and determine the remaining value  of supplies.  Say the value is $250.   The required entry is… Date DR. CR. 12/31/0 7 Office Supplies Expense $750     Office Supplies  (Asset) $750 To record Office Supplies consumed during the year. Resulting in a year-end balance of $250 in Office Supplies (Asset).
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Alternative Approach… Just expense entire amount when purchased, which eliminates the  time and payroll cost of taking a year-end inventory. Date DR. CR. 10/31/07 Office Supplies Expense $1,000      Cash $1,000 Any error of allocating the exact expense in each year will probably be 
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