On March 1 Smith Industries purchased supplies of $1,200 on account. The entry t

Question

On March 1 Smith Industries purchased supplies of $1,200 on account. The entry to record the purchase will include
a. a debit to Accounts Receivable and a credit to Supplies.
b. a debit to Supplies and a credit to Accounts Payable.
c. a debit to Supplies Expense and a credit to Accounts Receivable.
d. a debit to Supplies and a credit to Cash.

Then,

At January 1, 2017, Not So Fast Industries reported retained earnings of $125,000. During 2017, Not So Fast had a net loss of $30,000 and paid dividends of $15,000. At December 31, 2017, the amount of retained earnings is
a. $60,000.
b. $70,000.
c. $80,000.
d. $100,000.

Explanation / Answer

Answer 1) Option b. a debit to supplies and Credit to Account Payables

Answer 2) Option C. 80000$

Calculation

Retained Earning Beggining 125000 $

Less: Net Loss During the year (30000 $)

Less: Paid Dividends (15000 $)

Balance at the end 80000 $

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