Question

Problem 3-01 (Part Level Submission) Listed below are the transactions of Gary King, D.D.S., for the month of September. Sept. 1 King begins practice as a dentist, invests $20,600 cash and issues 2,060 shares of $10 par stock. 2 Purchases dental equipment on account from Green Jacket Co. for $18,780. 4 Pays rent for office space, $640 for the month. 4 Employs a receptionist, Michael Bradley. 5 Purchases dental supplies for cash, $940. 8 Receives cash of $1,860 from patients for services performed. 10 Pays miscellaneous office expenses, $380. 14 Bills patients $5,850 for services performed. 18 Pays Green Jacket Co. on account, $3,740. 19 Pays a dividend of $3,100 cash. 20 Receives $920 from patients on account. 25 Bills patients 150 for services performed. 30 Pays the following expenses in cash: Salaries and wages $1,680; miscellaneous office expenses $88. 30 Dental supplies used during September, $370. Record depreciation using a 5-year life on the equipment, the straight-line method, and no salvage value.

Answer 1

Explanation -

a. Balance Sheet Ledgers are balanced at the end of the year as on September 30.

b. All Income Statement Items at the end of the month transferred to Income Summary Account.

c. Balance of Income Summary Account then transfer to Retained Earnings.

d. Dividend also transfer to Retained Earnings.

1. Ledgers -

Equipment $18.780 Sept 2 Cash Sept 1 $ 20,600 Sept 4 $ 640 Sept 8 $ 1,860 Sept 5 $ 940 Sept 20 $ 920 Sept 10$ 380 Sept 18 $ 3,740 Sept 19 $ 3,100 Sept 30 $ 1,680 Sept 30$ 88 Sept 30 $ 18,780 Common Stock Sept 1 Sept 30 $ 12,812 $ 20,600 $ 23,380 $ 23,380 Sept 30 $ 20,600 Accounts Receivable Sept 14$ 5,850 Sept 20$ Sept 25$ 2,150 920 Sept 30 $ 7,080 Retained Earnings Income Dividend $ 3,100 Summary $ 6,389 $ 8,000 $ 8,000 Sept 30 $ 3,289 Rent Expense 640 Sept 4 $ $ 6,389 $ 6,389 Dividend $ 3,100 Sept 30$ 640 Sept 19 Retained Earnings $ 3,100 Supplies 940 Sept 30 Sept 5 $ $ 370 Accounts Payable $ 3,740 Sept 2 Sept 30$ 570 Sept 18 $ 18,780 $ 940 $ 940 Sept 30 $ 15,040 $ 18,780 $ 18,780 Office Expenses Sept 10$ 380 Income Sept 30$ 88 Summary $ 468 Service Revenue Income Sept 8 $ 1,860 Summary $ 9,860 Sept 14 $ 5,850 Sept 25 $ 2,150 $ 468 $ 468 Salaries and Wages Expense Sept 30 $ 1,680 Income Summary $ 1,680 Accumulated Depreciation - Equipment Sept 30$ 313 Sept 30$ 313 Supplies Expense Sept 30$ 370 Income Summaryl $ 370 $ 9,860 Income Summary Sept 30$ 640 Sept 30 Sept 30 $ 468 Sept 30 $ 1,680 Sept 30$ 370 Sept 30$ 313 Depreciation Expense Sept 30$ 313 Income Summaryl $ 313 Retained Earnings $ 6,389 $ 9,860 $ 9,860