Question

Required information (The following information applies to the questions displayed below.) Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows: Credit Debit $ 7 3 3 7 $ 2 6 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 Salarie Wages Supplies Expense Interest Expense Income Tax Expense Totals 2 5 0 0 0 0 0 0 0 0 0 0 0 0 $26 $26 Transactions during 2018 follow: a. Borrowed $14 cash on July 1, 2018, signing a six-month note payable. b. Purchased equipment for $17 cash on July 2, 2018. c. Issued additional shares of common stock for $5 on July 3. d. Purchased software on July 4, $3 cash. e. Purchased supplies on July 5 on account for future use, $7. f. Recorded revenues on December 6 of $47, including $8 on credit and $39 received in cash. g. Recognized salaries and wages expense on December 7 of $22; paid in cash. h. Collected accounts receivable on December 8, $9. i. Paid accounts payable on December 9, $10. j. Received a $3 cash deposit on December 10 from a hospital for a contract to start January 5, 2019. Data for adjusting journal entries on December 31: k. Amortization for 2018, $2. 1. Supplies of $3 were counted on December 31, 2018. m. Depreciation for 2018, $4. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2018 was $4 and will be paid in 2019.

Answer 1

H N Amount Amount Amount 47 B G Debit Credit Debit Credit Debit Credit 7 18 25 3 -1 2 3 7 7 3 7 17 24 2 4 6 6 3 9 2 2 4 M Particulars Assets Current Assets Cash Accounts receivable Office supplies Total Current Assets Particulars Service revenue Less: Expenses Depreciation exp Amortisation exp Salaries & wages expense Supplies expense Interest expense Income tax expesne Total expense 4 2 26 7 25 2 2 3 30 1 5 2 4 -3 14 44 0 0 14 4 4 24 -6 0 1 1 Profit 3 Particulars Cash Accounts receivable Supplies Equipment Accumulated dep Software Acc. Amortisation Accounts payable 1 Notes payable (short term) Salaries & wages payable 3 Interest payable Income tax payable 5 Deferred revenue 5 Common stock 5 Retained earnings 3 Service revenue Depreciation exp Amortisation exp 1 Salaries & wages expense 2 Supplies expense 3 Interest expense Income tax expesne 5 Total 0 4 4 0 9 3 5 3 20 -4 15 2 2 STATEMENT OF RETAINED EARNINGS Particulars Amount Opening Balance 2 Add: Profit 3 Closing Balance 5 23 53 0 47 47 0 4 4 2 2 0 0 0 2 26 26 Non Current Assets Tangible Equipment Less: Accumulated dpreciation Intangible Software Less: Acc amortisation Total non current Assets TOTAL ASSETS Liabilities and equity Current Liabilities Accounts Payable Notes payable Salaries & wages payable Interest payable Income tax payable Deferred revenue Total Current Liabilities Equity Common Stock Retained earnings Total equity Total liabilities and equity 2 14 7 7 1 0 4 1 4 0 4 1 26 26 88 88 107 107 4 3 28 5 7 3 3 20 5 1 25 53 2 3