What is the adjusting entry for your company's purchase of $40,000 of office supplies with $6,000 of unused supplies left at year-end?

The adjusting entry for the purchase of $40,000 of office supplies and $6,000 of unused supplies at year-end would be as follows:

Adjusting Entry for Office Supplies Purchase

22 May 2023

Explanation:

Debit: Supplies On Hand $40,000

Credit: Office Supplies Expense $34,000

Credit: Supplies On Hand $6,000

This entry debits the asset account Supplies On Hand for the total cost of the supplies initially purchased, and credits the expense account Office Supplies Expense for the amount of supplies used during the year. The remaining supplies, valued at $6,000, are credited to the asset account Supplies On Hand.

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