80.2K

Verified Solution

Link Copied!

The following information applies to the questions displayed below.]

Drs. Glenn Feltham and Gary Entwistle began operations of their physical therapy clinic called Northland Physical Therapy on January 1, 2014. The annual reporting period ends December 31. The trial balance on January 1, 2015, was as follows (the amounts are rounded to thousands of dollars to simplify):

Account Titles	Debit			Credit
Cash	$	8
Accounts Receivable		4
Supplies		4
Equipment		8
Accumulated Depreciation				$	2
Software		5
Accumulated Amortization					2
Accounts Payable					5
Notes Payable (short-term)					0
Salaries and Wages Payable					0
Interest Payable					0
Income Taxes Payable					0
Unearned Revenue					0
Common Stock					14
Retained Earnings					6
Service Revenue					0
Depreciation Expense		0
Amortization Expense		0
Income Tax Expense		0
Interest Expense		0
Supplies Expense		0
Totals	$	29		$	29

Transactions during 2015 (summarized in thousands of dollars) follow:
1.	Borrowed $30 cash on July 1, 2015, signing a six-month note payable.
2.	Purchased equipment for $33 cash on July 1, 2015.
3.	Issued additional shares of common stock for $4.
4.	Earned revenues for 2015 of $65, including $10 on credit and $55 received in cash.
5.	Recognized salaries and wages expense for 2015 of $38; paid in cash.
6.	Purchased software, $4 cash.
7.	Collected accounts receivable, $7.
8.	Purchased supplies on account for future use, $6.
9.	Paid accounts payable, $8.
10.	Received a $4 cash deposit from a hospital for a contract to start January 5, 2016.

Data for adjusting journal entries:
11.	Amortization for 2015, $2.
12.	Supplies of $4 were counted on December 31, 2015.
13.	Depreciation for 2015, $2.
14.	Accrued interest of $1 on notes payable.
15.	Salaries and wages incurred not yet paid or recorded, $2.
16.	Income tax expense for 2015 was $5 and will be paid in 2016.

CS-29788 01-14-2016

5.

value: 3.07 points

Required information

Required:

2.

Record journal entries for transactions (1) through (10). (If no entry is required for atransaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.) Record the borrowing $30 cash on July 1, 2015, signing a six-month note payable. Record the purchase of equipment for $33 cash on July 1, 2015. Record the issuance of additional shares of common stock for $4. Record the entry for revenues for 2015 of $65, including $10 on credit and $55 received in cash. Record salaries and wages expense for 2015 of $38, paid in cash. Record the purchase of software, $4 cash. Record the collection of accounts receivable, $7. Record the purchase of supplies on account for future use, $6. Record the payment of accounts payable, $8. Record the receipt of $4 cash deposit from a hospital for a contract to start January 5, 2016.

6.

value: 3.07 points

Required information

3, 5 and 8.

Set up T-accounts for the accounts on the trial balance. Enter beginning balances and post the transactions 1-10, adjusting entries 11-16, and closing entry. (Enter your answers in thousands of dollars.)

rev: 10_05_2015_QC_CS-27569

7.

value: 3.07 points

Required information

3.	Post the journal entries from requirement 2 to T-accounts and prepare an unadjusted trial balance.(Enter your answers in thousands of dollars.)

8.

value: 3.07 points

Required information

4.	Record the adjusting journal entries (11) through (16). (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

1.

Record the adjusting entry for amortization for 2015, $2.

2.

Record the adjusting entry for supplies counted on December 31,2015 for $4.

3.

Record the adjusting entry for depreciation for 2015, $2.

4.

Record the adjusting entry for accured interest for $1 on notes payable.

5.

Record the adjusting entry for salaries and wages earned but not paid for $2.

6.

Record the adjusting entry for income tax expense for 2015 for $ 5 that will be paid in 2016.

rev: 12_22_2015_CS-34623

9.

value: 3.07 points

Required information

5.	Post the adjusting entries from requirement 4 and prepare an adjusted trial balance. (Enter your answers in thousands of dollars.)

10.

value: 3.07 points

Required information

6-a.	Prepare an income statement (Enter your answers in thousands of dollars.)

6-b.	Prepare the statement of retained earnings. (Enter your answers in thousands of dollars.)

6-c.	Prepare the balance sheet. (Enter your answers in thousands of dollars. Amounts to be deducted should be indicated by a minus sign)

11.

value: 3.07 points

Required information

7.	Prepare the closing journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Enter your answers in thousands of dollars.)

Record entry to close revenue and expense accounts to retained earnings.

12.

value: 3.07 points

Required information

8.	Post the closing entry from requirement 7 and prepare a post-closing trial balance. (Enter your answers in thousands of dollars.)

13.

value: 3.16 points

Required information

9-a.	How much net income did the physical therapy clinic generate during 2015? (Enter your answers in thousands of dollars.)

9-b.	Is the business financed primarily by liabilities or stockholders equity?
	Liabilities Stockholders' Equity

9-c.	What is its current ratio? (Enter your answers in thousands of dollars.)

Answer & Explanation Solved by verified expert

See Answer