20 Jul Accounting
| Bluemark Health Care Inc. is owned and operated by Dr. George Hancock, the sole stockholder. | ||
| Bluemark’s January 1, 2017 trial balance appears below. | ||
| Bluemark Health Care, Inc. | ||
| Trial Balance | ||
| January 1, 2017 | ||
| Account | Debit | Credit |
| Cash | 40,000 | |
| Accounts Receivable | 60,000 | |
| Prepaid Insurance | – 0 | |
| Supplies | 2,000 | |
| Building | 330,000 | |
| Accumulated Depreciation | 40,000 | |
| Land | 200,000 | |
| Accounts Payable | 43,500 | |
| Unearned Rent Revenue | – 0 | |
| Wages Payable | – 0 | |
| Interest Payable | – 0 | |
| Notes Payable | 200,000 | |
| Capital Stock | 50,000 | |
| Retained Earnings | 298,500 | |
| Dividends | – 0 | |
| Income Summary | ||
| Service Revenue | – 0 | |
| Rent Revenue | – 0 | |
| Wages Expense | – 0 | |
| Utilities Expense | – 0 | |
| Rent Expense | – 0 | |
| Interest Expense | – 0 | |
| Miscellaneous Expense | ||
| Advertising Expense | – 0 | |
| Supplies Expense | – 0 | |
| Insurance Expense | – 0 | |
| Depreciation Expense | – 0 | |
| 632,000 | 632,000 | |
| Bluemark Health Care completed the following transactions during January 2017 | ||
| Trans #/Date | Description | |
| # 1 – Jan 1 | Received $6,000 from Rivers Company as rent for the use of a vacant office in Bluemark | |
| Health Care’s building. Rivers paid rent six months in advance (hint: credit unearned rent revenue). | ||
| #2 – Jan 1 | Paid $9,000 for an insurance premium on a general business policy. This payment | |
| was debited to Prepaid Insurance. | ||
| #3 – Jan 6 | Purchased supplies of $5,000 on account. | |
| #4 – Jan 9 | Collected $28,000 for services provided to customers on account. | |
| #5 – Jan 11 | Paid creditors $21,000 on account. | |
| #6 – Jan 18 | The sole shareholder invested an additional $70,000 in the business in exchange for | |
| capital stock. | ||
| #7 – Jan 20 | Billed patients $164,000 for services provided on account. | |
| #8 – Jan 25 | Received $26,000 for services provided to customers who paid cash. | |
| #9 – Jan 30 | Paid cash for expenses as follows: wages, $51,000, utilities, $8,000, rent on medical | |
| equipment, $6,800, miscellaneous, $400, and advertising, $4,300. | ||
| #10 – Jan 30 | Paid dividends of $14,000 to stockholders (Dr. Hancock). | |
| #11 – Jan 30 | Received $102,000 cash from customers in payment of services billed on Jan 20. | |
| January 31, 2017 Bluemark Health Care adjustment data appears below: | ||
| Adjust A | $1,500 of the prepaid insurance expired during January. | |
| Adjust B | $3,000 of supplies were on hand on January 31. (hint: check the unadj supplies bal first). | |
| Adjust C | January depreciation on building was $1,100. | |
| Adjust D | $1,000 of unearned rent revenue was earned. | |
| Adjust E | Wages owed employees but not paid was $8,000. | |
| Adjust F | Services provided but not yet billed to patients was $10,000. | |
| Adjust G | There was $2,100 in interest payable on 1/31/17 related to the $200,000 notes payable. | |
| Requirements: | ||
| 1 | Under “Journal Entries” in the “journal, adjust & close entries” worksheet, prepare | |
| journal entries for the 11 transactions in January 2017. | ||
| 2 | Post (enter) the journal entries from (1) to the Ledger (T-Accounts) in the “Ledger” worksheet. | |
| (Beginning balances have already been entered in the Ledger accounts.) | ||
| 3 | Under “Adjusting Entries” in the “journal, adjust & close entries” worksheet, prepare the | |
| adjusting entries A through G. | ||
| 4 | Post (enter) the adjusting entries from (3) to the Ledger (T-Accounts) in the “Ledger” worksheet. | |
| 5 | Prepare the adjusted trial balance in the “adjusted and post trial balance” worksheet by | |
| transferring the adjusted ending balances from the “Ledger” worksheet. | ||
| 6 | Prepare an income statement and retained earnings statement for January 2017 and a | |
| January 31, 2017 balance sheet in the “financial statements” worksheet using the ending balances | ||
| from the adjusted trial balance. | ||
| 7 | Prepare closing entries at January 31, 2017 (in the “journal, adjust & close entries” worksheet) as follows: | |
| (1) Close revenue to Income Summary Account | ||
| (2) Close expenses to Income Summary Account | ||
| (3) Close Income Summary Account to Retained Earnings | ||
| (4) Close Dividends to Retained Earnings | ||
| 8 | Post (enter) closing entries from (7) to the Ledger (T-Accounts) in the “Ledger” worksheet. | |
| Then prepare a January 31, 2017 post-closing trial balance in the “adjusted and post trial balance” worksheet | ||
| by transferring the final balances from the “Ledger” worksheet. | ||
| (Note: there should be no income statement accounts appearing on the post-closing trial balance because | ||
| the income statement accounts should all have zero balances.) |
Ledger
| Cash | Unearned Rent Revenue | Service Revenue | Supplies Expense |
| 40,000 | 0 | ||
| Accounts Receivable | Wages Payable | Rent Revenue | Insurance Expense |
| 60,000 | 0 | ||
| Prepaid Insurance | Interest Payable | Wages Expense | Depreciation Expense |
| 0 | 0 | ||
| Supplies | Notes Payable | Utilities Expense | |
| 2,000 | 200,000 | ||
| Building | Capital Stock | Rent Expense | |
| 330,000 | 50,000 | ||
| Accumulated Deprec – Bldg | Retained Earnings | Interest Expense | |
| 40,000 | 298,500 | ||
| Land | Dividends | Miscellaneous Expense | |
| 200,000 | |||
| Accounts Payable | Income Summary | Advertising Expense | |
| 43,500 |
journal, adjust & close entries
| Journal Entries: | |||
| JE# | Accounts/Description | Debit | Credit |
| 1 | Prepaod Insurnace | 9,000 | |
| 2 | |||
| 3 | |||
| 4 | |||
| 5 | |||
| 6 | |||
| 7 | |||
| 8 | |||
| 9 | |||
| 10 | |||
| 11 | |||
| Adjusting Entries: | |||
| Adjust | Accounts/Description | Debit | Credit |
| A | |||
| B | |||
| C | |||
| D | |||
| E | |||
| F | |||
| G | |||
| Closing Entries: | |||
| Adjust | Accounts/Description | Debit | Credit |
| 1 | |||
| 2 | |||
| 3 | |||
| 4 |
adjusted and post trial balance
| Bluemark Health Care, Inc. | Bluemark Health Care, Inc. | ||||
| Adjusted Trial Balance | Post Closing Trial Balance | ||||
| January 31, 2017 | January 31, 2017 | ||||
| Account | Debit | Credit | Account | Debit | Credit |
financial statements
| Bluemark Health Care, Inc. | Bluemark Health Care, Inc. | Bluemark Health Care, Inc. |
| Income Statement | Retained Earnings Statement | Balance Sheet |
| Month Ended January 31, 2017 | Month Ended January 31, 2017 | January 31, 2017 |
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