Entertainment Services USA started the year with $200 of supplies. During the year the company purchased additional supplies costing $1,200. There was $800 of supplies on hand at the end of the year. The financial statements will report what amounts?
Income Statement Balance Sheet
A. $800 $600
B. $600 $800
C. $600 $200
D. $1,200 $800
E. $1,200 $–0–
Answer: B. $600 $800
Working notes for the above answer is as under
We have been given that, entertainment Services USA started the year with $200 of supplies. During the year the company purchased additional supplies costing $1,200 and $800 of supplies on hand at the end of the year.
So ,Debit to expanses
=200+1200-800
=600
and in balance sheet supplies on hand
=800
