Supplies Expense of $4,000 was recorded for 20x7. Assuming that $2,200 in supplies were purchased during the year and $640 in supplies remained at year end, what was the cost of supplies at the beginning of the year?
Supplies are different from direct materials, indirect materials, or raw materials. It is not used in the production but, it is used in the business activity which may be related to production or administration.
Answer and Explanation:
The beginning inventory of supplies are $2,440.
Compute the beginning inventory of supplies as follows: -
|Computation for beginning inventory of Supplies|
|Supplies Expense (used)||$4,000.00|
|Add: Ending Inventory||$640.00|
|Cost of supplies available for use||$4,640.00|
|Less: Purchase during the period||$2,200.00|
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from Financial Accounting: Help and ReviewChapter 13 / Lesson 5