Andrew Is a Barber Who Does His Own Accounting for His

question 211

Short Answer

Andrew is a barber who does his own accounting for his shop. When he buys supplies he routinely debits Supplies Expense. Andrew purchased $1700 of supplies in January and his inventory at the end of January shows $400 of supplies remaining. What adjusting entry should Andrew make on January 31? a. $\begin{array}{ll}\text { Supplies Expense } &400\\ \text { Supplies } &&400\\\end{array}$

b. $\begin{array}{ll}\text { Supplies Expense } &1,700\\ \text { Cash }&&1,700\end{array}$

c. $\begin{array}{ll} \text { Supplies } &400\\\text { Supplies Expense } &&400\\\end{array}$

d. $\begin{array}{ll}\text { Supplies Expense } &,1,300\\ \text { Supplies } &&1,300\\\end{array}$

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Definitions:

Standard Cost

A preset cost for delivering a product or service under normal conditions, used as a benchmark for measuring performance.

Direct Labor Workers

Employees who are directly involved in the production process of goods or services, whose labor costs are easily attributable to specific products.

Fixed Overhead

Costs that remain constant for a specific period regardless of the level of production or business activity.

Work in Process

Inventory that includes all materials, labor, and overhead costs for products that are in the production process but not yet completed.