Question

2.    The partial adjusted trial balance of Starlight Company at January 31, 2018, shows the following.

STARLIGHT COMPANY

Adjusted Trial Balance

January 31, 2018

                                                                                                                    Debit                  Credit

Supplies...............................................................................................      $ 1,800

Prepaid Insurance................................................................................          5,250

Salaries and Wages Payable..................................................................                                   $1,675

Accounts Receivable............................................................................          3,200

Supplies Expense.................................................................................          6,500

Insurance Expense...............................................................................             750

Salaries and Wages Expense.................................................................          8,900

Service Revenue..................................................................................                                   13,000

Instructions

Answer the following questions, assuming the year begins January 1.

1. If the amount in Supplies Expense is the January 31 adjusting entry, and $7,100 of supplies was purchased in January, what was the balance in Supplies on January 1? (2 points)
2. If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for two years, what was the total premium and when was the policy purchased? (2 points)
3. If $8,450 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2017? (2 points)
4. If cash receipts from the customers in January were 14,500, what was the balance in Accounts Receivable at December 31, 2017? (2 points)

Answer 1

If the amount in Supplies Expense is the January 31 adjusting entry, and $7,100 of supplies was purchased in January, what was the balance in Supplies on January 1?

Answer is

Ending Balance + Supplies Expense less Purchase

=$1800+$6500-$7100

=$1200

If the amount in Insurance Expense is the January 31 adjusting entry, and the original insurance premium was for two years, what was the total premium and when was the policy purchased? (2 points)

750*24 months=$18000

If $8,450 of salaries was paid in January, what was the balance in Salaries and Wages Payable at December 31, 2017? (2 points)

Salaries and Wages Payable+Salaries and Wages Expense less Paid

=1675+8900-8450

=$2125

If cash receipts from the customers in January were 14,500, what was the balance in Accounts Receivable at December 31, 2017?

Accounts Receivable+Service Revenue less cash receipts from the customers

3200+13000-14500=$1700