Question

Debit S8 Credit Account Titles Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term) Salaries and wages Payable Interest Payable Income Taxes Payable Deferred Revenue Common Stock Retained Earnings Service Revenue Depreciation Expense Amortization Expense Salaries and Wages Expense Supplies Expense Interest Expense Incone Tax Expense Totals $27 Transactions during 2018 (summarized in thousands of dollars) follow a Borrowed $15 cash on July 1, 2018, signing a six-month note payable. b. Purchased equipment for $18 cash on July 2. 2018 c Issued additional shares of common stock for $4 on July 3. d. Purchased software on July 4, $4 cash. e Purchased supplies on July 5 on account for future use. $6. f Recorded revenues on December 6 of $50, including $10 on credit and $40 received in cash 9. Recognized salaries and wages expense on December 7 of $23. pald In cash h. Collected accounts receivable on December 8, $7. Pald accounts payable on December 9. $8. 1. Received a $4 cash deposit on December 10 from a hospital for a contract to start January 5, 2019 Data for adjusting Joumal entries on December 31: k Amortization for 2018. $1. 1. Supplies of $4 were counted on December 31, 2018 m Depreciation for 2018. $2 n. Accrued interest of o. Salaries and wages incurred but not yet paid or recorded. $5. p. Income tax expense for 2018 was $5 and will be paid in 2019 < Prev

Answer 1

In the given problem following steps are involved:

1) Passing of journal entries for transactions occurred during the year 2018.

2) Passing of Adjusting Entries

3) Preparation of adjusted trial balance.

4)Preparation of Income statement, Retained Earning Statement and Balance sheet

- Debit D ($ in 000s) Credit $15 $15 $18 Step 1 Journal entry for Transaction for 2018 Particulars 1-Jul-18 Cash Notes Payable (To Record borrowing of cash) 2-Jul-18 Equipment Cash (To Record purchase of land) 3-Jul-18 Cash Common Stock (To Record issue of common sck) 4-Jul-18 Software Cash (To Record purchase of software) 5-Jul-18 Supplies Accounts Payable (To Record purchase of supplies) 6-Dec-18 Accounts Receivable Cash Service Revenue (To Record sales) 7-Dec-18 Salaries and Wages Expense Cash (To Record salary expense) 8-Dec-18 Cash Accounts Receivable (To Record payment received) 9-Dec-18 Accounts Payable Cash (To Record payment made) 10-Dec-18 Cash Deferred Revenue (To Record adavnce paid by customer) $10 $40 $50 $23 $23

Debit Credit $1 Step 2 Adjusting Entries Date Particulars 31-Dec-18 Amortisation Expense Accumulated Amortisation (To Record Amortisation on sofware) 31-Dec-18 Supplies Expense Supplies (To Record supplies Expense) 31-Dec-18 Depreciation Expense Accumulated Depreciation (To Record Depreciation on Equipment) 31-Dec-18 Interest Expense Interest Payable (To Record interest accrue on notes payable) 31-Dec-18 Salaries and Wages Expense Salaries and Wages Payable (To Record interest accrue on notes payable) 31-Dec-18 Income Tax Expense Income Tax Payable (To Record income tax provision) Working Supplies Expense 1 Supplies Opening as on 01/01/2018 Add: Purchases Less: Closing as on 31/12/2018 Supplies Expense

Step3 Physical Therapy Clinic ($ in 000s) Trial Balance Entry Adjustment January 1, 2018 Debit Credit Debit Credit Adjusted Trail Balance December 31, 2018 Debit Credit Particulars Cash Accounts Receivable Supplies Land Equipment Accumulated Depreciation Software Accumulated Amortisation Accounts Payable Notes Payable Salaries and Wages Payable Interest Payable Income Tax Payable Deferred Revenue Common Stock Retained Earnings Service Revenue Salaries and Wages Expense Depreciation Expense Amortisation Expense Interest Expense Income Tax Expense Supplies Expense $27 $27 $160 $160 $112 $112

Amount $50 Physical Therapy Clinic Income Statement For the year ended 31st December 2018 ($ in 000s) Particulars Amount Service Revenue Less: Operating Expense Salaries and Wages Expense Depreciation Expense Amortisation Expense Interest Expense Supplies Expense tal Operating Expense Operating Income Less: Income Tax Expense Net Income ($38) $12 ($5) $7 Physical Therapy Clinic Statement of Retained Earnings For the year ended 31st December 2018 ($ in 000s) Particulars Retained Earnings at 1st January 2018 Net Income for the year ended 31st December 2018 Dividend paid shareholders Retained Earnings at 31st December 2018 Amount

Amount Assets Cash Accounts Receivable Supplies Physical Therapy Clinic Balance Sheet December 31, 2018 ($ in 000s) Amount Amount Liabilities $26 Accounts Payable $6 Notes Payable $4 Salaries and Wages Payable Interest Payable Income Tax Payable Deferred Revenue $36 Total Current Liabilities Total Current Assets Assets $32 $25 Equipment Less: Accumulated Depreciation Shareholders' Equity Common Stock Retained Earnings $22 Total Shareholders' Equity ($3) $18 $14 $32 Software Less: Accumulated Amortisation ($2) $6 Total Assets $64 Total Liabilities and Shareholder's Equity $64 Ans 9A Net Income (S in 000s) Net Profit margin ($7/$50] 14.0% Ans 9B The company is financed primarily by Shareholder's Equity. This is evident from the balance sheet. Ans 9C Current Ratio Numerator Current Assets Denominator Current Liabilities $36 = 1.13 $32