Muldoon advertising has an opening balance in its supplies account of $2,400 and purchases $3,000 of supplies during the year. a year-end physical count shows $2800 in supplies inventory. which is the appropriate journal entry at year end?
a) dr supplies expense $2,600
cr supplies $ 2,600
b) dr supplies expense $2,800
cr supplies $ 2,800
c) dr supplies $2,600
cr supplies expense $ 2,600
d) dr supplies $3,000
cr cash $3,000

A) Dr Supplies Expense $2,600

Cr Supplies $ 2,600

Explanation:

The supplies account had an opening balance of $ 2400. Purchases were made of $ 3000 so the total debit balance was $ 5400. The year end showed a debit balance of $ 2800.

So  $ 5400- $ 2800= $ 2600 Supplies were used and credited .

An expense account would be used to show this so

Supplies Expense is debited with $ 2600 and

Supplies Account is credited with $ 2600 showing a net debit balance of $ 2800 at the end of the year.