Question

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 the amounts are rounded to thousands of dollars to simplify): Credit Debit $ 7 3 3 8 $1 5 1 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 Income Tax Expense Totals 0 0 0 0 0 15 4 0 0 0 0 0 0 0 $26 $26 Transactions during 2018 (summarized in thousands of dollars) follow: a. Borrowed $22 cash on July 1, 2018, signing a six-month note payable. b. Purchased equipment for $25 cash on July 2, 2018. c. Issued additional shares of common stock for $5 on July 3.

Above is the information for the accounting problem. And the 3 screenshots below are the problems, I need help with. Journal entry #17. Also want to go over my balance sheet to see if I am missing something. And my current ratio, because the value I am getting (0.94) is incorrect

Answer 1

General Journal Service revenue To Income Summary (To close revenue account) (In thousands) Debit ($) Credit ($) 55 55 50 33 1 Income Summary Salaries and wages expense Amortization expense Depreciation expense Interest expense Income Tax expense Supplies expense (To close expense account) 4 1 4 7 5 Income Summary Retained Earning (To close net income) 5

Asset Current Asset Cash Account Receivable Supplies 2 22 NORTHLAND PHYSICAL THERAPY Balance Sheet At December 31, 2018 (in thousand) Liabilities Current Liabilities 25 Account Payable 2 Notes Payable (short term) 3 Salaries and wages payable Interest payable Income Tax payable Deferred Revenue $30 Total Current Liabilities 33 Stockholders Equity (5) $28 Common Stock 8 Retained Earning (2) $6 Total Stockholders Equity $ 64 Total Liabilities and Stockholders Equity 3 1 4 3 $ 35 Total Current Asset Equipment Accumulated Depreciation - Equipment Software Accumulated amortization Total Assets 20 9 $29 $ 64 Current ratio Current Asset / Current Liabilities $30/$35 $0.857 Current ratio

Working Note (In thousands) Debit ($) Credit ($) Date General Journal July 1, 2018 22 Cash Note payable (Borrowed through note payable) 22 July 2,2018 25 Equipment Cash (Purchase of equipment) 25 July 3,2018 5 Cash Common stock (Issue of common stock) 5 July 4,2018 3 Software Cash (Purchase of software) 3 July 5,2018 7 Supplies Accounts payable (Purchase of supplies) 7 Dec. 6,2018 47 8 Cash Accounts receivable Service revenue (Revenue recorded) 55

Dec. 7,2018 30 Salaries and wages expense Cash (Salaries paid) 30 Dec. 8,2018 9 Cash Accounts receivable (Accounts receivable collected) 9 Dec. 9,2018 10 Accounts payable Cash (Accounts payable paid) 10 3 Dec. 10,2018 Cash Deferred revenue 3

1 Adjusting entries Dec. 31,2018 Amortization expense Accumulated amortization (Amortization accounted) 1 7 Dec. 31,2018 Supplies expense Supplies (Supplies consumed) 7 Dec. 31,2018 Depreciation expense Accumulated depreciation (Depreciation accounted) 4 1 1 Dec. 31,2018 Interest expense Interest payable (Accrued interest on notes payable accounted) 3 3 Dec. 31,2018 Salaries and wages expense Salaries and wages payable (Accrued salaries and wages expense accounted) 4 Dec. 31,2018 Income tax expense Income tax payable (Income tax expense accounted) 4

Hope You Understood. If you have any doubt please leave a comment. Thank You