Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
5th Edition
ISBN: 9780134078939
Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura
Publisher: PEARSON
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Textbook Question
Chapter 2, Problem 2.29AP
Problems Group A
Journalizing transactions, posting
Vincent Yarwood practices medicine under the business title Vincent Yarwood, M.D. During July, the medical practice completed the following transactions:
| Jul. 1 | Yarwood contributed $68,000 cash to the business in exchange for common stock. |
| 5 | Paid monthly rent on medical equipment, $550. |
| 9 | Paid $17,000 cash to purchase land to be used in operations. |
| 10 | Purchased office supplies on account, $1,800. |
| 19 | Borrowed $24,000 from the bank for business use. |
| 22 | Paid $1,700 on account. |
| 28 | The business received a bill for advertising in the daily newspaper to be paid in August, $290. |
| 31 | Revenues earned during the month included $6,000 cash and $5,500 on account. |
| 31 | Paid employees’ salaries $2, 000, office rent $ 1,000, and utilities $550. Record as a compound entry. |
| 31 | The business received $1,260 f or medical screening services to be performed next month. |
| 31 | Paid cash dividends of $7,400. |
The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense.
Requirements
1. Journalize each transaction. Explanations are not required.
2. Post the journal entries to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal.
3. Prepare the trial balance of Vincent Yarwood, M.D., as of July 31, 2017.
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APPLICATION
Dr. King decided to put up a medical clinic. Below are the
transactions for the month of July.
Required:
1.
Journalize the transactions.
2.
Prepare the T-accounts.
Prepare the trial balance.
July 4 King invested cash of P1, 000, 000
July
5 Bought office equipment at P20, 000 paying 25% and the balance on account
July
7 Withdrew cash P70, 000 for personal use
July 15 Rendered medical treatment to Mr. Sy P40, 000 on account
July 21 Paid secretaries' salaries for P6, 000
July 30 Bought supplies on account P2, 000
construct the Journal Entry of the transaction:
Date/#
Account Title
Debit
Credit
Oct-01
Garcia invested P30,000 cash to start his business.
2
Purchased medical Supplies on account, P10,000
2
Paid monthly office rent of P4,000.
3
Recorded P5,000 revenue for service rendered to patients: received cash of P2,000 and sent bills to patients for the remainder.
15
Borrowed P50,000 from the bank, signing a note payable
22
Performed service for patients on account, P3,600
30
Received cash from patients billed on September 3, P2,000
31
Received and paid a utility bill, P200
31
Paid monthly salary to nurses, P3,000
31
Paid interest expense of P200
List and record each transaction (in 000s) for the Claymont Outpatient Clinic, under the accrual basis of accounting, at December 31, 20X1. You are creating a General Ledger using exhibit 3-6 on page 112 as a guide. Zelman( Workbook)
a. The clinic received a $10,000,000 unrestricted cash contribution from the community.
b. The clinic purchased $4,500,000 of equipment using cash.
c. The clinic borrowed $2,000,000 from the bank on a long-term basis.
d. The clinic purchased $550,000 of supplies on credit.
e. The clinic provided $8,400,000 of services on credit.
f. In the provision of these services, the clinic used $420,000 of supplies.
g. The clinic received $800,000 in advance to care for capitated patients.
h. The clinic incurred $4,500,000 in labor expenses and paid cash for them.
i. The clinic incurred $2,230,000 in general expenses and paid cash for them.
j. The clinic received $6,000,000 from patients and their 3rd party payers in payment of outstanding accounts.
k.…
Chapter 2 Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
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