On January 1, Smith Had $2,000 of Supplies on Hand

True/False

On January 1, Smith had $2,000 of supplies on hand. During January, Smith purchased $4,000 worth of new supplies. At the end of the month, a count revealed $1,000 worth of supplies remaining on the shelves. The adjustment entry needed will include a debit to Supplies Expense of $5,000. The supplies were initially recorded as an asset.