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Dr. Dolittle had a veterinary clinic_ Financial statements




Question;Dr. Dolittle had a veterinary clinic. The following accounts and balances appeared;on the books as of April 30, 2013;Cash $22,000 Notes Payable $10,000;Accounts Receivable 8,000 Accounts Payable 7,000;Office Supplies;2,000 Contributed Capital 70,000;Land ` 40,000 Retained Earnings 33,000;Building 35,000 Veterinary;Service Revenue 70,000;Office Fixtures and Equipment 27,000 Advertising Expense;10,000;Medical Instruments 18,000 Salary Expense 28,000;The business transactions;for May are shown below;MAY;1 Dr. Dolittle invested $400,000 cash in;the business in exchange for;5,000;shares of stock.;4 Additional land and a buildings were;purchased for $150,000. Of this amount;$70,000;applied to the land, and $80,000 to the building. A cash payment of;$90,000;was made at the time of the purchase, and a note payable was issued for;the remaining;balance.;9 Medical instruments were purchased for;$130,000 cash.;16 Office;fixtures and equipment were purchased for $50,000. Dr. Dolittle paid;$20,000 at;the time of purchase and agreed to pay the entire remaining balance in;15 days;(account payable).;21 Office;supplies expected to last several months were purchased for $5,000 cash.;24 Dr. Dolittle;billed clients $9,200 for services rendered.;Of this amount, $7,900;was;received in cash, and the balance was billed on account (due in 30 days).;27 A $800;invoice was received for several radio advertisements aired in May.;The;entire amount is due to be paid on June 5.;(Use accounts payable);28 Received $6,500;from account receivable collected;29 Paid $5,500;of accounts payable that had become due.;31 Paid;employees $4,200 for salaries earned by them in May.;See next page for instructions;INSTRUCTIONS;A. Make up a T account for each;account and put in the beginning balances as given;above.;B. Prepare journal;entries for each transaction (list date, then the accounts and amounts;debited and credited- in good form) For example, May 1;May;1 Cash (+A) 400,000;Capital;Stock (+SE) 400,000;4???????;??????;C. Analyze the;effects that each of these transactions will have on the following six;components of;the company?s financial statements for the month of May.;Organize your;answer in tabular from, using the column headings shown below. Use;I for;increase, D for decrease, and NE;for no effect. The May 1 transaction;would be as follows;Income Statement Balance Sheet;Transaction;Revenue - Expense = NI Assets = Liabilities + Owners? Equity;May 1 NE NE NE I NE I;4;etc.;D. Post each;transaction from (B) to the appropriate T account.;E.;Prepare a trial balance dated May 31, 2013. A trial balance lists all accounts in a;column, then all debit balances opposite those with debit, all credit balances;opposite those accounts with credit balances, and proves that total debits;equal total credits.;F. Using figures from;the trial balance prepared in part E, compute total assets, total;liabilities, and;owners? equity.;G. Did May appear;to be a profitable month? (support your;answer)


Paper#45175 | Written in 18-Jul-2015

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