Horngren's Financial & Managerial Accounting, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780133851267
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 1, Problem 1.29E
Using the
Samantha Stamford opened a medical practice. During July, the first month of operation, the business, titled Samantha Stamford, M.D., experienced the following events:
July 6 | Stamford contributed $65,000 in the business by opening a bank account in the name of S. Stamford, M.D. The corporation issued common stock to Stamford. |
9 | Paid $52,000 cash for land. |
12 | Purchased medical supplies for $1,600 on account. |
15 | Officially opened for business. |
20 | Paid cash expenses: employees’ salaries, $1,500; office rent, $1,300; utilities, $350. |
31 | Earned service revenue for the month, $8,000, receiving cash. |
31 | Paid $800 on account. |
Analyze the effects of these events on the accounting equation of the medical practice of Samantha Stamford, M.D., using the following format:
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Helen Moynihan, MD, opened a medical practice. The business completed the following transactions:
Jul 1 Moynihan invested $30,000 cash to start her medical practice. The business issued common stock to Moynihan.
Jul 2 Purchased medical supplies on account totaling $8,300.
Jul 3 Paid monthly office rent of $5,500.
Jul 6 Recorded $8,300 revenue (in cash) for service rendered to patients.
After these transactions, how much cash does the business have to work with? Use a T-account to show your answer.
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Begin by posting the transactions, using the date as a posting reference. Then, label and calculate the ending balance, using "Bal" as the posting reference.
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The Dog & Cat Hospital, owned by Kate Miller, a veterinarian, opened for business on December 1 of the current year.
Using the horizontal worksheet below, record the following December transactions. Total the columns to show that assets equal liabilities plus stockholders' equity as of December 31.
1. Miller opened a checking account on December 1 at Biltmore Bank in the name of The Dog & Cat Hospital and deposited $12,500 Miller received common stock for her investment.
2. Paid rent for December, $750.
3. Purchased office equipment on account, $1,450.
4. Purchased supplies for cash, $950.
5. Billed clients for services rendered, $3,650.
6. Paid secretary's salary, $975.
7. Paid $750 on account for the equipment purchased on December 3.
8. Collected $2,900 from clients previously billed for services.
9. The firm paid stockholders $1,500 cash as a dividend.
Note: Use negative signs with answers, when appropriate.
Assets
Liabilities
Stockholders' Equity
=
Accounts
Office
Accounts
Common…
Vernon Yung practices medicine under the business title Vernon Yung, M.D. During
July, the medical practice completed the following transactions:
Jul 1 Yung deposited $68,000 cash in the business bank acount.
The business gave capital to Yung.
5 Paid monthly rent on medical equipment, $560.
9 Paid $16,000 cash to purchase land for an office site.
10 Purchased supplies on account, $1,600.
19 Borrowed $23,000 from the bank for business use. Yung signed
a note payable to the bank in the name of the business.
22 Paid $1,300 on account.
31
Revenues carned during the month included $6,500 cash and
$5,800 on account.
Paid employees' salaries $2,500, office rent $1,100, and
utilities $400. Make a single compound entry.
31 Yung withdrew cash of $7,000.
31
The business uses the following accounts: Cash; Accounts receivable; Supplies; Land;
Accounts payable; Notes payable; Yung, capital; Yung, drawing; Service revenue;
Salary expense; Rent expense; and Utilities expense.
Requirements
1.…
Chapter 1 Solutions
Horngren's Financial & Managerial Accounting, Student Value Edition (5th Edition)
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