Question

P3-1 (Transactions, Financial Statements—Service Company) Listed below are the transactions of Yasunari Kawabata, D.D.S., for the month of September.

Sept. 1 Kawabata begins practice as a dentist and invests $20,000 cash.
2 Purchases furniture and dental equipment on account from Green Jacket Co. for $17,280.
4 Pays rent for office space, $680 for the month.
4 Employs a receptionist, Michael Bradley.
5 Purchases dental supplies for cash, $942.
8 Receives cash of $1,690 from patients for services performed.
10 Pays miscellaneous office expenses, $430.
14 Bills patients $5,820 for services performed.
18 Pays Green Jacket Co. on account, $3,600.
19 Withdraws $3,000 cash from the business for personal use.
20 Receives $980 from patients on account.
25 Bills patients $2,110 for services performed.
30 Pays the following expenses in cash: office salaries $1,800; miscellaneous office expenses $85.
30 Dental supplies used during September, $330.

Instructions
(a) Enter the transactions shown above in appropriate general ledger accounts (use T-accounts). Use the following ledger accounts: Cash; Accounts Receivable; Supplieson Hand; Furniture and Equipment; Accumulated Depreciation; Accounts Payable; Yasunari Kawabata, Capital; Service Revenue; Rent Expense; Miscellaneous Office Expense;Office Salaries Expense; Supplies Expense; Depreciation Expense; and Income Summary. Allow 10 lines for the Cash and Income Summary accounts, and 5 lines for each ofthe other accounts needed. Record depreciation using a 5-year life on the furniture and equipment, the straight-line method, and no salvage value. Do not use a drawingaccount.

(b) Prepare a trial balance.

(c) Prepare an income statement, a statement of owner's equity, and an unclassified balance sheet.

(d) Close the ledger.

(e) Prepare a post-closing trial balance.

Answer 1

The required general ledger accounts are provided below Cash Income Summary S680 S942 S430 S3,600 3,000 S1,800 S85 S20,000 S1,690 S980 S12,133 Accounts Receivable Supplies on Hand S5,820 S2,110 S980 S942 S330 Bal. S6,950 Bal. S612 Furniture and Equipment Accumulated Depreciation $17,280 S288 S17,280 S288 YK, Capital S3,000 Accounts Pavable S3,600 S17,280 S20,000 S13,680 Bal. S17,000

Service Revenue Rent Expense S1,690 S5,820 S2,110 S680 S9,620 Bal. S680 Miscellaneous Office Expense Office Salaies Expense S430 S85 S1,800 S515 Bal. S1,800 Supplies Expense Depreciation Expense S330 S288* S330 Bal. S288 *{(S17,280/5) x (1/12)) S288

2. The trial balance of Company YK as of September 30 is provided below: Company YK Trial Balance September 30 Debit Credit Cash Accounts receivable Supplies on hand Furniture and e Accumulated depreciati Accounts payable YK, c Service revenue Rent e Miscellaneous office e Office salaries e Supplies e $12,133 $6,950 $612 S17,280 S288 $13,680 S17,000 S9,620 on $680 $515 $1,800 S330 $288 S40,588 eciation ex Totals S40,588

The income statement for the month of September is provided below Company YK Income Statement September 30 Service revenue $9,620 Less Rent e Miscellaneous office e Office salaries e Supplies e $680 $515 $1,800 S330 $288 eciation Total e Net income S6.007 The statement of owner's equity as of September 30 is provided below: Company YK Statement of Owner's Equity September 30 Cash invested by owner Add: Net income $20,000 S26,007 $3.000 S23.007 Less: YK, withdrawals capital, September 30

The unclassified balance sheet as of September 30 is provided below Company YK Unclassified Balance Sheet As of September 30 Amount (S) ASSETS Current Assets: Cash Accounts Receivable Supplies on hand Total current assets $12,133 $6,950 S612 $19,695 Property, Plant, and Equipment Furniture and e Accumulated depreciation Total assets $17,280 S288 S36,687 LIABILITIES AND OWNERS EOUITY Current Liabilities: Accounts payable Total current liabilities S13.680 S13,680 Owners' Equitv: Yk, C Total owners' equity Total liabilities and owners' equity $23,007 S23,007 S36,687

The required ledger accounts on closing the ledger are provided below: Cash Income Summary S680 S942 S430 $3,600 $3,000 $1,800 S85 S680 S515 $1,800 S330 S288 S20,000 $1,690 S980 S9,620 Bal. S12,133 Net income S6,007 Accounts Receivable Supplies on Hand S5,820 S2,110 S980 S942 S330 S6,950 S612 Furniture and Equipment Accumulated Depreciation S17,280 $288 Bal. S17,280 Bal. S288 Accounts Pavable S3,600 $17,280 S3,000 S20,000 S6,007 Bal. S13,680 Bal. $23,007

Service Revenue S9,620 Rent Expense $1,690 S5,820 $2,110 S680 S680 Miscellaneous Office Expense Office Salaries Expense S430 S85 S515 S1,800 S1,800 Supplies Expense Depreciation Expense S330 S330 S288* S288

The post-closing trial balance of Company YK as of September 30 is provided below Company YK Post-Closing Trial Balance September 30 Debit Credit Cash Accounts receivable Supplies on hand Furniture and e Accumulated depreciation Accounts payable YK, capital S12,133 $6,950 S612 $17,280 $288 $13.680 S23.007 S36,975 Totals S36,975

Answer 2