Texts: Use the UNADJUSTED trial balance of Kameryn Stores and the additional information in each part of the problem on the next page to answer the following questions. Kameryn prepares ANNUAL financial statements at December 31 each year, so many of these questions require you to consider the effects of adjusting entries that need to be made before the financial statements are prepared.
Unadjusted Trial Balance, 12/31/20X3
Cash
Prepaid Legal Fees
Supplies on hand
Equipment
Accum. Depreciation - Equip.
Deferred revenue
Notes Payable
Common Stock
Retained Earnings
Dividends
Revenue
Wage expense
Supplies expense
Rent expense
Total
DR.
62,320
12,000
1,800
356,000
21,000
132,500
21,760
84,700
692,080
CR.
165,000
13,500
80,000
62,000
64,380
307,200
692,080
Kameryn recorded supplies purchases of $21,760 as they occurred during Year 8. A physical count of supplies shows that Kameryn has $1,500 of supplies on hand at the end of Year 8.
1. What is the necessary adjusting entry?
2. What should be the balance in the Supplies on hand account on the balance sheet at 12/31/Year 8?
* Label your answers as 1. or 2. at the top of the answer box.
* For Question 1, indicate DR or CR on each line of your entry. Attach the words expense or revenue to income statement account titles when/if you create one of those.
* Required: Show any work AFTER your answer to question 2.