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Question - A photo processing store purchased of?ce supplies on January 15 by paying cash of $5,000. On January 1, the Supplies account had a beginning balance of $500. On December 31, an inventory revealed that supplies on hand amounted to $500.
A) What adjusting journal entry is necessary at December 31 st?
B) How much will be reported on the balance sheet at December 31 for Supplies?
C) How much supplies expense will be reported on the income statement?
D) If the adjustment in part A is not recorded, what will be the impact on the income statement, retained earnings statement, and balance sheet?
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