Allied Company is a mail order retailing company. The following existed at Decem

Question

Allied Company is a mail order retailing company. The following existed at December 31 [year-end] prior to any adjusting entries being made.

Balance in the "Shipping Supplies" account = $22,000

Balance in the "Shipping Supplies Expense" account = $98,000

Shipping supplies on hand, counted on Dec. 31 = $6,000

Which one of the following is the AJE [adjusting journal entry] which should be made at December 31 related to "supplies"? [Hint: You might want to make t-accounts.]

A) dr. Shipping Supplies Expense 114,000
cr. Shipping Supplies 114,000
B) dr. Shipping Supplies 6,000
cr. Shipping Supplies Expense 6,000
C) dr. Shipping Supplies Expense 16,000
cr. Shipping Supplies 16,000
D) dr. Shipping Supplies 16,000
cr. Shipping Supplies Expense 16,000

Explanation / Answer

The adjusting entry will be made for the difference in Shippling supplies account and the Shipping supplies in hand. Therefore the correct Adjusting Journal entry will be C) dr. Shipping Supplies Expense 16,000 cr. Shipping Supplies 16,000

Related Questions

Navigate

• Browse (All)
• Browse A
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.