Question

Listed below are the transactions of James Smith, D.D.S., for the month of September.

Sept.   1		Smith begins practice as a dentist, invests $20,620 cash and issues 2,062 shares of $10 par stock.
2		Purchases dental equipment on account from Green Jacket Co. for $17,340.
4		Pays rent for office space, $740 for the month.
4		Employs a receptionist, Michael Bradley.
5		Purchases dental supplies for cash, $890.
8		Receives cash of $1,740 from patients for services performed.
10		Pays miscellaneous office expenses, $450.
14		Bills patients $6,230 for services performed.
18		Pays Green Jacket Co. on account, $3,260.
19		Pays a dividend of $3,270 cash.
20		Receives $980 from patients on account.
25		Bills patients $2,240 for services performed.
30		Pays the following expenses in cash: Salaries and wages $1,680; miscellaneous office expenses $86.
30		Dental supplies used during September, $360.

Record depreciation using a 5-year life on the equipment, the straight-line method, and no salvage value.

Prepare an income statement.

Prepare a retained earnings statement.

Prepare an unclassified balance sheet.

Close the ledger.

Answer 1

1. Journal Entries -

James Smith, D.D.S. Journal Entries Date Accounts Title Debit Credit Sept 1 Cash $ 20,620 Common Stock $ 20,620 (Being Cash invested against common stock) Sept 2 Dental Equipment $ 17,340 Accounts Payable (Being Equipment purchased) $ 17,340 740 Sept 4 Rent Expenses $ Cash (Being Rent Expense Paid) $ 740 Sept 4 No Entry Sept 5 890 Dental Supplies $ Cash (Being Supplies Purchased) S 890 Sept 8 Cash $ 1,740 Service Revenue (Being Service Revenue Earned) $ 1,740 450 Sept 10 Office expenses $ Cash (Being Office Expense Paid) $ 450 Sept 14 Accounts Receivable $ 6,230 Service Revenue (Being Service earned on Account) $ 6,230 Sept 18 Accounts Payable $ 3,260 Cash (Being payment made on account) $ 3,260 Sept 19 Dividend $ 3,270 Cash (Being Dividend Paid) $ 3,270 Sept 20 Cash $ 980 Accounts Receivable (Being Amount received on account) 980 Sept 25 Accounts Receivable $ 2,240 Service Revenue (Being Service earned on Account) $ 2,240 Sept 30 Salaries and wages $ 1,680 office expenses $ 86 Cash (Being Expense paid) $ 1,766 360 Sept 30 Dental Supplies Expenses $ Dental Supplies (Being Supplies Utilised) $ 360 Sept 30 Depreciation Expense $ 3,468 Accumulated Depreciation (Being Depreciation Expense incurred) $ 3,468

2. Ledgers -

Dividend Sept 19$ 3,270 Cash Sept 1 $ 20,620 Sept 4 $ 740 Sept 8 $ 1,740 Sept 5 $ 890 Sept 20$ 980 Sept 10 $ 450 Sept 18$ 3,260 Sept 19$ 3,270 Sept 30 $ 1,766 Sept 30 $ 3,270 Sept 30 $ 12,964 Sept 8 $ 23,340 $ 23,340 Service Revenue $ 1,740 Sept 14$ 6,230 Sept 25$ 2,240 Sept 30 $ 10,210 Dental Supplies $ 890 Sept 30$ Sept 5 360 Sept 30$ 530 Rent Expenses 740 Sept 4 $ $ 890 $ 890 Sept 30$ 740 Accounts Receivable Sept 14 $ 6,230 Sept 20 $ Sept 25 $ 2,240 980 Sept 30 $ 7,490 Office expenses Sept 10$ 450 Sept 30 $ 86 Sept 30$ $ 8,470 $ 8,470 536 Dental Equipment $ 17,340 Sept 2 Sept 30 $ 17,340 Salaries and wages Sept 30 $ 1,680 Sept 30 $ 1,680 Accumulated Depreciation Sept 30$ 3,468 Sept 30$ 3,468 Dental Supplies Expenses Sept 30$ 360 Sept 30$ 360 Accounts Payable Sept 18$ 3,260 Sept 2 $ 17,340 Sept 30 $ 14,080 Depreciation Expense Sept 30 $ 3,468 $ 17,340 $ 17,340 Sept 30 $ 3,468 Common Stock Sept 1 $ 20,620 Sept 30 $ 20,620

3. Income Statement -

James Smith, D.D.S. Income Statement For the month of September Service Revenue $ 10,210 Expenses: Rent Expenses Office expenses Salaries and wages Dental Supplies Expenses Depreciation Expense Total Expenses $ 740 $ 536 $ 1,680 $ 360 $ 3,468 $ 6,784 Net Income $ 3,426

4. Statement of Retained Earnings -

James Smith, D.D.S. Statement of Retained Earnings For the month of September Retained Earnings, Opening $ (+) Net Income $ 3,426 Dividend $ (3,270) $ 156 Retained Earnings, Closing $ 156

5. Balance Sheet -

James Smith, D.D.S. Balance Sheet September Assets Current Asset: Cash Dental Supplies Accounts Receivable Total Current Assets $ 12,964 $ 530 $ 7,490 $ 20,984 Dental Equipment Accumulated Depreciation $ 17,340 $ (3,468) $ 13,872 Total Assets $ 34,856 Liabilities and Stockholder's Equity Current Liabilities: Accounts Payable $ 14,080 Stockholder's Equity: Common Stock Retained Earnings $ 20,620 $ 156 $ 20,776 Total Liabilities and Stockholder's Equity $ 34,856