BlueStar Company, Stine Company
Not what you're looking for?
Please help in the following problems.
Problem # 1
The following information is available for BlueStar Company for the month ending December 31, 2006:
1. Supplies used during the month totaled $1,596.
2. BlueStar paid the annual premium of $6,000 on their insurance on December 1.
3. BlueStar performed services valued at $14,000 during the last week of December. Their clients have not yet been billed.
4. BlueStar pays their staff for a 5-day work week each Friday. The weekly payroll totals $3,450. December 31 falls on a Wednesday.
5. BlueStar has a 5-year note payable to SouthTrust Bank for $40,000 due on July 31, 2009. Interest is payable annually on July 31 and is accrued monthly at the annual rate of 7.5%.
Students must include supporting calculations for the adjusted balance amounts for all of the accounts below. Use the information to determine the balance to be reported on the December 31 financial statements for the following accounts:
Account Unadjusted balance, 12/31/2006 Adjusted balance, 12/31/2006
Supplies $2,040
Prepaid Insurance $6,000
Accounts Receivable $32,000
Salaries Payable $0
Interest Payable $1,000
Problem # 4
Presented below is an adjusted trial balance for Stine Company, at December 31, 2006.
Cash $14,700 Accounts payable $10,000
Accounts receivable 20,000 Notes payable 9,000
Prepaid insurance 15,000 Accumulated Depreciation?
Equipment 35,000 Equipment 14,000
Depreciation expense 7,000 Service revenue 25,000
Dividends 1,500 Common Stock 2,000
Advertising expense 1,400 Unearned revenue 16,000
Rent expense 800 Retained Earnings 4,000
Salary expense 1,000
Insurance expense 1,600
$98,000 $98,000
Instructions
(a) Prepare closing entries for December 31, 2006.
(b) Determine the balance in the Retained Earnings account after the entries have been posted. Students must include supporting calculations for Part (b).
Purchase this Solution
Solution Summary
This solution is comprised of a detailed explanation to determine the balance to be reported on the December 31 financial statements for BlueStar Company, prepare closing entries for December 31, 2006 and determine the balance in the Retained Earnings account after the entries have been posted for Stine Company.
Solution Preview
Problem # 1
The following information is available for BlueStar Company for the month ending December 31, 2006:
1. Supplies used during the month totaled $1,596.
2. BlueStar paid the annual premium of $6,000 on their insurance on December 1.
3. BlueStar performed services valued at $14,000 during the last week of December. Their clients have not yet been billed.
4. BlueStar pays their staff for a 5-day work week each Friday. The weekly payroll totals $3,450. December 31 falls on a Wednesday.
5. BlueStar has a 5-year note payable to SouthTrust Bank for $40,000 due on July 31, 2009. Interest is payable annually on July 31 and is ...
Purchase this Solution
Free BrainMass Quizzes
Employee Orientation
Test your knowledge of employee orientation with this fun and informative quiz. This quiz is meant for beginner and advanced students as well as professionals already working in the HR field.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Lean your Process
This quiz will help you understand the basic concepts of Lean.
Academic Reading and Writing: Critical Thinking
Importance of Critical Thinking