During the first year of Wilkinson Co.'s operations, all purchases were recorded as assets. Store supplies in the amount of $19,350 were purchased. Actual year-end store supplies amounted to $6,450. The adjusting entry for store supplies will a. increase net income by $12,900. b. increase expenses by $12,900. c. decrease store supplies by $6,450. d. debit Accounts Payable for $6,450.

b. increase expenses by $12,900.

Explanation:

When supplies are purchased, the entries required are debit to supplies account and a credit to cash. when the supplies are used up, debit supplies expense and credit supplies account.

Hence, the amount to be expensed is the difference between the purchases and the ending supplies balance if the opening balance in supplies account is nil.

Supplies used up

= $19,350 - $6,450

= $12,900

This will be posted as a debit to the supplies expense account.