07 - SOLUTION Problems 7-3

07 - SOLUTION Problems 7-3 - Problem 7-3 Solution...

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Unformatted text preview: Problem 7-3 Solution Requirement 1 – July 1 purchase of supplies Date 7/1/11 Account Name Debit Supplies Cash Credit 1,315 1,315 Purchase supplies Requirement 2 – July 31 supplies on-hand $1,097 Shop Towels 80 x $4 = $320 Degreasing Fluid 65 x $9 = $585 Gasket Sealer 32 x $6 = $192 Total $1,097 Requirement 3 – “T” Account Analysis for July 31 adjusting entry “T” Account Analysis for Assets and Liability Accounts Supplies (asset account) Account Name Debit (1) What is the current balance? 1,315 (3) What adjustment is required to adjust from the current balance to the should be balance? (2) What should be the balance? Credit 218 1,097 Requirement 4 – July 31 supplies adjusting entry Date 7/31/11 Account Name Debit Supplies Expense Supplies 218 July Supplies adjusting entry Credit 218 Problem 7-3 Solution (continued) Requirement 5 – August 31 supplies on-hand $784 Shop Towels 55 x $4 = Degreasing Fluid 48 x $9 = Gasket Sealer 22 x $6 = Total $220 $432 $132 $784 Requirement 6 – “T” Account Analysis for August 31 adjusting entry “T” Account Analysis for Assets and Liability Accounts Supplies (asset account) Account Name Debit (1) What is the current balance? 1,097 (3) What adjustment is required to adjust from the current balance to the should be balance? (2) What should be the balance? Credit 313 784 Requirement 7 – August 31 supplies adjusting entry Date 8/31/11 Account Name Debit Supplies Expense Supplies Credit 313 313 August Supplies adjusting entry Requirement 8 – Total dollar amount of supplies consumed during first two months of operation $531 $218 + $313 = $531 ...
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07 - SOLUTION Problems 7-3 - Problem 7-3 Solution...

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