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: Debit Credit $ 8 4 9 $ 1 4 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 1 4 0 0 0 0 0 14 0 0 0 0 0 0 0 $29 $29 Transactions during 2018 follow: a. Borrowed $21 cash on July 1, 2018, signing a six-month note payable. b. Purchased equipment for $24 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 $56, including $10 on credit and $46 received in cash. g. Recognized salaries and wages expense on December 7 of $29; paid in cash.

Answer 1

CASH ACCOUNT Description Ref Date Debit Credit a $21 b $24 с $4 July, 1 July,2 July 3 July,4 Dec, 6 Dec, 7 d Note Payable Equipment Common Stock Software purchase Revenue Salary and wages expenses Total $4 f $46 8 $29 $57 $71

ADJUSTMENTS Debit Credit Ref Credit $57 Debit $8 $4 $4 $9 TRANSACTIONS-2018 Debit $71 $10 $6 $24 1 $6 m $2 $4 $4 k $1 Credit Ref a,b,c,d,f. f e b $1 d $1 $4 e $0 a $0 $0 $0 $0 $14 C $9 $0f $6 $21 TRIAL BALANCE, JANUARY,1,2018 Account Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Softwares . Accumulated amortization Accounts payable Notes payable(Short term) Salaries and wages payable wance Interest payable Income tax payable Deferred revenue Common Stock HE Retained Earnings Service Revenue Depreciation expense Amortization expense Salaries and wages Expenses Supplies Expense Interest expense Income tax expense Total o n $4 $1 $5 ADJUSTED TRIAL BALANCE-Dec31,2018 Account Debit Credit Cash $22 Accounts Receivable $14 Supplies $4 Equipment $33 Accumulated Depreciation $3 Cat Softwares $8 Accumulated amortization $2 Accounts payable $10 Notes payable(Short term) $21 Salaries and wages payable $4 Interest payable $1 Income tax payable $5 Deferred revenue $0 Cocool Common Stock $18 Retained Earnings $9 Service Revenue $56 Depreciation expense $2 Amortization expense $1 Salaries and wages Expense $33 Supplies Expense $6 Interest expense $1 Income tax expense $5 Total $129 $129 ſi р $4 $56 8 $29 $0 $0 $0 $0 $0 $0 $29 EO-CO $2 $1 $4 $6 $1 $5 $19 n n р $29 $144 $144 $19

$56 INCOME STATEMENT Service Revenue Operating Expenses: Depreciation expense Amortization expense Salaries and wages Expenses Supplies Expense Total Operating Expenses EBIT(Earning Before Interest & Taxes Interest expense Before Tax Income Income tax expense Net Income $2 $1 $33 $6 $42 $14 $1 $13 $5 $8 Retained Earnings at Beginning Add: Net Income Retained Earnings at End of the ye $9 $8 $17

BALANCE SHEET Assets Current assets Cash Accounts Receivable Supplies Total Current assets Equipment Accumulated Depreciation Softwares Accumulated Amortization $22 $14 $4 $40 $33 (53) $8 ($2) Liabilities Current Liabilities Accounts payable Notes payable(Short term) Salaries and wages payable Interest payable Income tax payable Total Current Liabilities Stock holders Equity Common Stock Retained Earnings Total Stockholders Equity Total Liabilities and Stockholers Equity $10 $21 $4 $1 $5 $41 $18 $17 $35 Total Assets $76 $76