Pioneer advertising agency inc. Purchased advertising supplies costing $2,500 on October 5. Pioneer recorded that transaction by increasing (debiting) the asset advertising supplies. This account shows a balance of $2,500 in the october 31 trial balance. An inventory count at the close of business on october 31 reveals that $1,000 of supplies are still on hand. Thus the cost of supplies used is $1,500 ($2,500-$1,000). Pioneer makes the following adjusting entry.