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Knoll Company started Year 2 with a $500 balance in its Cash account, a $500 balance in its Supplies account and a $1,000 balance in its common stock account. During Year 2 the company experienced the following events.

Answer :

Answer:Please refer to the explanation section

Explanation:

The questions is incomplete, the events that were experienced by the company during the two year are missing in the question. we will assume these events took place in order to illustrate through journal entries how transactions and events  affect the account balances mentioned in the question.

1. Knoll Company issued 100 shares at a price of $5 per share.

2. Knoll Company purchased supplies costing $250  cash

3 Knoll Company Purchased inventory costing $ 600 cash

journal entries

Dr Bank   500

Cr       Shareholders equity 500

Dr Supplies  250

Cr        Bank      250

Dr Inventory 300

Cr         Bank      300

Balances at the end of year 2

Cash Account = 500 + 500 - 250 - 300 = $450

Supplies  = 500 + 250 = $750

Equity = 1000 + 500 = $1500

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