Question

10 MUMS Dr. McMuffin has a medical clinic formed as a corporation that provides specialty care services to patients. The balances in the accounts as of January 1, 2019 are as follows: Cash 68,000 122,000 71,200 Accounts Receivable Office Supplies Building Land Office Fixtures and Equipment Medical Instruments Accounts Payable 47.000 Notes Payable 44,000 Contributed Capital 6,200 Retained Earnings 87.000 Patient Service Revenue 51,000 Income Tax Expense 28,000 Compensation Expense 40,000 Insurance Expense 42,000 Utilities Expense Below are the business transactions for January for Dr. McMuffin's clinic: JANUARY Purchased Office Fixtures and Equipment for $20,000. The clinic paid $10,000 in cash and financed the remaining balance with debt by signing a note promising to pay in three years. Ignore interest. 2 Received $65,000 of cash from an investor in exchange for shares of stock in the clinic. Billed clients $75,000 for services rendered. Of this amount, $10,000 was received in cash, and the balance was billed on account (due in 30 days). 8 Received $25,000 from customers on previously billed medical services (.e., medical services provided in 2018). 10 Purchased office supplies on account expected to last a few months for $2,000. 15 Purchased medical instruments for $12,000 in cash. 20 Received a $2,000 invoice for insurance coverage in January. The entire amount is due to be paid on February 26. You can consider this an Account Payable. 26 Paid $5,000 in income taxes for taxes incurred during January, 27 30 Paid suppliers $7,000 included in accounts payable. Paid Light Co. $3,000 for utilities used in the clinic during the month of January 31 Paid employees $25,000 in salaries for work done during the month of January

Thanks in advance!

Answer 1

Solution:
	Journal Entries
				$
Date	Particulars	Particulars	Debit	Credit
1-Jan	Office Fixtures & Equipment A/c Dr.		$           20,000
		To Cash		$      10,000
		To Notes Payables		$      10,000
2-Jan	Cash A/c Dr.		$           65,000
		To Common Stock		$      65,000
5-Jan	Accounts Receivable A/c Dr.		$           75,000
		To Sales		$      75,000
5-Jan	Cash A/c Dr.		$           10,000
		To Accounts Receivable A/c		$      10,000
8-Jan	Cash A/c Dr.		$           25,000
		To Accounts Receivable A/c		$      25,000
10-Jan	Office Supplies A/c Dr.		$             2,000
		To Accounts payable		$        2,000
15-Jan	Medical Instruments A/c Dr.		$           12,000
		To Cash		$      12,000
20-Jan	Insurance Expenses A/c Dr.		$             2,000
		To Accounts payable		$        2,000
26-Jan	Income tax Expense A/c Dr.		$             5,000
		To Cash		$        5,000
27-Jan	Accounts Payable A/c Dr.		$             7,000
		To Cash		$        7,000
30-Jan	Utilities Expense A/c Dr.		$             3,000
		To Cash		$        3,000
31-Jan	Employee Expense A/c Dr.		$           25,000
		To Cash		$      25,000