Question

Listed below are the transactions of John Kawabata, D.D.S., for the month of September.

Sept. 1		Kawabata begins practice as a dentist and invests $21,480 cash.
2		Purchases dental equipment on account from Green Jacket Co. for $19,140.
4		Pays rent for office space, $763 for the month.
4		Employs a receptionist, Michael Bradley.
5		Purchases dental supplies for cash, $966.
8		Receives cash of $1,720 from patients for services performed.
10		Pays miscellaneous office expenses, $450.
14		Bills patients $6,090 for services performed.
18		Pays Green Jacket Co. on account, $4,390.
19		Withdraws $3,980 cash from the business for personal use.
20		Receives $1,070 from patients on account.
25		Bills patients $2,620 for services performed.
30		Pays the following expenses in cash: Salaries and wages $3,400; miscellaneous office expenses $98. (Record each separately.)
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.

a)   Enter the transactions shown above in appropriate general ledger accounts (use T-accounts). Use the following ledger accounts: Cash, Accounts Receivable, Supplies, Equipment, Accumulated Depreciation—Equipment, Accounts Pay- able, Owner’s Capital, Service Revenue, Rent Expense, Office Expense, Salaries and Wages Expense, Supplies Expense, Depreciation Expense, and Income Summary. Allow 10 lines for the Cash and Income Summary accounts, and 5 lines for each of the other accounts needed. Record depreciation using a 5-year life on the equipment, the straight-line method, and no salvage value. Do not use a drawing account.

(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

Answer

a)

General Ledger Cash Date 1sept 8 sept 20 sept Debit Credit 21480 4 sept 1720 5 sept 1070 10 sept 18 sept 13 sept 30 sept 30 sept 763 966 450 4390 3400 98 Closing Balance 10223 Total 24270 Total 24270 Ovners Capital Date 19 sept Debit Date 3980 1sept Credit 21480 Closing Balance 17500 Total Equipment 21480 Total 21480 Date Debit Date Credit 2 sept 19140 Closing Balance 19140 Total 19140 Total 19140

Accounts Payable Date 18 sept Debit Date 4390 2 sept Credit 19140 Closing Balance Total Rent Expense 14750 19140 Total 19140 Date 4 sept Debit Date 763 Credit Closing Balance 763 Total Supplies 763 Total 763 Date 5 sept Debit Date Credit 966 30 sept 370 Closing Balance 596 Total 966 Total 966 Service Revenue Date Debit Date Credit 8 sept 14 sept 25 sept 1720 6090 2620 Closing Balance 10430 Total 10430 Total 10430

Office epenses Date 10 sept 30 sept Debit Date Credit 450 Closing Balance 548 Total Accounts Receivable 548 Total 548 Date 14 sept 25 sept Debit Date Credit 6090 20 sept 2620 1070 Closing Balance 7640 Total Salaries and Wages 8710 Total 8710 Date Debit Date Credit 30 sept 3400 Closing Balance 3400 Total Supplies expenses 3400 Total 3400 Date 30 sept Debit Date 370 Credit closing Balance 370 Total 370 Total 370

b)

Trial Balance Unadjusted Debit Credit Cash Equipment Supplies Accounts Receivable 10223 19140 596 7640 Rent expense Office expenses Salaries and wages Suppliers expenses Depreciation Expense 763 548 3400 370 Owners Capital Accounts Payable Depreciation Equipment Sales Revenue 17500 14750 10430 Total 4268042680

c)

Income Statement Sales Revenue 10430 Total Income 10430 Rent expense Office expenses Salaries and wages Suppliers expenses Depreciation Expens Total expenses 763 548 3400 370 319 5400 Net Profit 5030 Statement of Owners Equity Capital Less Drawings Add Profit for month Balance in Capital 21480 3980 5030 22530 Unclassified Balance Sheet Assets Cash Equipment Accumulated Depreciation equipment Supplies Accounts Receivable7640 Liabilities 10223 Owners Capital 19140 Accounts Payable 22530 14750 319 596 Total 37280 37280

d)

Closing Entry Depreciation expense Depreciation provided for 1 month Debit Credit 319 319

e)

Closing Trial Balance Unadjusted Adjustments Closing Debit Credit DebitCredit Debi Credit Cash Equipment Supplies Accounts Receivable 10223 19140 596 7640 10223 19140 596 7640 Rent expense Office expenses Salaries and wages Suppliers expense:s Depreciation Expense 763 548 3400 370 763 548 3400 370 319 319 Owners Capital Accounts Payable Accumulated Depreciation Equipment Sales Revenue 17500 17500 14750 319 10430 14750 319 10430 Total 268042 42680 319 19 429994 42999