Problem

Preparing financial statements from the trial balance [20-30 min]Link Back to Chapter 1 (I...

Preparing financial statements from the trial balance [20-30 min]

Link Back to Chapter 1 (Income Statement, Statement of Retained Earnings, Balance Sheet). Refer to Problem After completing the trial balance in Problem prepare the following financial statements for Vince Rockford, M.D., P.C.:

Requirements

1. Income statement for the month ended March 31, 2012.
2. Statement of retained earnings for the month ended March 31, 2012. The beginning balance of retained earnings was $0.
3. Balance sheet at March 31, 2012.

Analyzing and journalizing transactions, posting, and preparing a trial balance [45-60 min]

Vince Rockford practices medicine under the business title Vince Rockford, M.D., P.C. During March, the medical practice completed the following transactions:

Mar 1	Rockford deposited $74,000 cash in the business bank account. The business issued common stock to Rockford.
5	Paid monthly rent on medical equipment, $560.
9	Paid $24,000 cash to purchase land for an office site.
10	Purchased supplies on account, $1,300.
19	Borrowed $19,000 from the bank for business use. Rockford signed a note payable to the bank in the name of the business.
22	Paid $900 on account.
31	Revenues earned during the month included $7,100 cash and $4,700 on account.
31	Paid employees’ salaries $2,000, office rent $1,600, and utilities $320. Make a single compound entry.
31	Paid cash dividends of $8,000.

The business uses the following accounts: Cash, Accounts receivable, Supplies, Land, Accounts payable, Notes payable, Common stock, Dividends, Service revenue, Salary expense, Rent expense, and Utilities expense.

Requirements

1. Journalize each transaction, as shown for March 1. Explanations are not required.
2. Post the transactions to the T-accounts, using transaction dates as posting references in the ledger accounts. Label the balance of each account Bal, as shown in the chapter.
3. Prepare the trial balance of Vince Rockford, M.D., P.C., at March 31, 2012.