Horngren's Financial & Managerial Accounting, The Financial Chapters, Student Value Edition (5th Edition)
5th Edition
ISBN: 9780133851731
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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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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Students have asked these similar questions
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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.
CEDO
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.
Cash
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.…
You are the Accountant for Ching Wei Tai, a sole trader business operating downtown,
Kingston. The following transactions occurred during the year.
2021
December
Started Business with capital of $16,000 in the bank and $13,600 in cash.
Bought goods on credit from the following persons: Grant $3,200; Brown $4,800 and Ricketts $3,000
Sold goods on credit to: Marvin $10,000; Jamie $24,800; Ruth $1,800
4.
5
Paid Rent by cash $2,080.
6.
Marvin paid us his account by cheque $2000
Jamie paid us $1,400 by cheque.
10
We paid the following by cheque: Grant S1,600; Brown $2,000.
12
Paid Electricity bill by cash $1000
31
The owner, Ching Wei Tai, took $2,400 from the bank for personal use.
31
Required:
Enter the following transactions in the Ledger Accounts (T-Accounts) of Ching Wei Tai
Balance off the accounts (where appropriate, do the Balance brought down/Balance
Brought Forward as at January 1, 2022)
Extract a trial balance as at December 31, 2021 for Ching Wei Tai.
I.
II.
II
Chapter 1 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters, Student Value Edition (5th Edition)
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