An entity reported prepaid supplies at the beginning of the year with a balance of P400,000 before the reversing entry

An entity reported prepaid supplies at the beginning of the year with a balance of P400,000 before the reversing entry. Payments for supplies during the year amounted to P2,500,000 and were recorded as expense. A physical count at the end of the year revealed supplies unused costing P500,000. Reversing entries are made by the entity. What is the adjusting entry at year-end? a. Debit Prepaid Supplies and credit Supplies Expense P100,000 b. Debit Supplies Expense and credit Prepaid Supplies P100,000 c. Debit Supplies Expense and credit Prepaid Supplies P2,400,000 d. Debit Prepaid Supplies and credit Supplies Expense P500,000

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