On June 1 During Its First Month of Operations Crooked

question 59

Essay

On June 1 during its first month of operations Crooked Rain purchased supplies for $4500 and debited the supplies account for that amount. At June 30 an inventory of supplies showed $1000 of supplies on hand. What adjusting journal entry should be made for June?

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Definitions:

Demand Decrease

A situation where there is a reduction in the quantity of a good or service that consumers are willing and able to purchase at any given price.

Equilibrium

A condition or state in which economic forces are balanced, such as the point where supply equals demand.

Market Clear

A situation in which the market reaches a state where quantity supplied equals quantity demanded, leaving no surplus or shortage.

Surplus

An excess of income or assets over expenditure or liabilities in a given period, typically a fiscal year, leading to available resources beyond what is required.