Problem #1 Mr. Blue is alicensed skin doctor. During the first month of the operation ofhis business, the following events and transactionsoccurred.
· April1 Invested $20,000 cash in his business.
· 1Hired a secretary-receptionist at a salary of $700 per week payablemonthly.
· 2Paid office rent for the month $1,100.
· 3Purchased doctor office’s supplies on account from Dazzle Company$4,000.
· 10Performed medical services and billed insurance companies$5,100.
· 11Received $1,000 cash advance from Sebastian for the medicalservice.
· 20Received $2,100 cash for services performed fromJames.
· 30Paid secretary-receptionist for the month $2,800.
· 30Paid $2,400 to Dazzle for accounts payable due.
Mr. Blue uses the following chart of accounts: No. 101Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201Accounts Payable, No. 209 Unearned Service Revenue, No. 301 Owner’sCapital, No. 400 Service Revenue, No. 726 Salaries and WagesExpense, and No. 729 Rent Expense.
Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts.
(c) Prepare a trial balance on April 30,2018
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Problem #3 The adjusted trialbalance columns of the worksheet for Company, owned by Meteor andBlue, are as follows.
Meteor and Blue’s COMPANY
Worksheet
For the Year Ended December 31,2018
| Trial Balance | | |
| | Dr. | Cr. |
101 | Cash | 5,300 | |
112 | Accounts Receivable | 10,800 | |
126 | Supplies | 1,500 | |
130 | Prepaid Insurance | 2,000 | |
157 | Equipment | 27,000 | |
158 | Accumulated Depreciation | | 5,600 |
200 | Notes Payable | | 15,000 |
201 | Accounts Payable | | 6,100 |
212 | Salaries and Wages Payable | | 2,400 |
230 | Interest Payable | | 600 |
301 | Owner’s Capital | | 13,000 |
306 | Owner’s Drawing | 7,000 | |
400 | Service Revenue | | 61,000 |
610 | Advertising Expense | 8,400 | |
631 | Supplies Expense | 4,000 | |
711 | Depreciation Expense | 5,600 | |
722 | Insurance Expense | 3,500 | |
726 | Salaries and Wages Expense | 28,000 | |
905 | Interest Expense | 600 | |
Totals | 103,700 | 103,700 | |
Instructions
(a) Complete the worksheet by extending the balances tothe financial statement columns.
(b) Prepare an income statement, owner’s equitystatement, and a balance sheet.
(Note: $5,000 of the notes payable become due in 2019.)D. Thao did not make any additional investments in the businessduring the year.
(c) Prepare the closing entries.
