Answer: The correct answer is 4. debit supplies expense, $3,500; credit supplies, $3,500.
Explanation: Since at the end of June, the inventory of the supply indicated $3,000 on hand, it implies that $3,500 had already been expensed (utilized) by White Laundry Company. This has to be taken out to operating expenses, in terms of passing the accounting journals, from the asset (inventory) where the total amount of $6,500 was posted.