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Question & Answer: Listed below are the transactions of John Kawabata, D.D.S., for the month of September……

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 $24,270 cash.
2 Purchases dental equipment on account from Green Jacket Co. for $19,020.
4 Pays rent for office space, $728 for the month.
4 Employs a receptionist, Michael Bradley.
5 Purchases dental supplies for cash, $1,014.
8 Receives cash of $1,790 from patients for services performed.
10 Pays miscellaneous office expenses, $500.
14 Bills patients $5,860 for services performed.
18 Pays Green Jacket Co. on account, $3,780.
19 Withdraws $3,360 cash from the business for personal use.
20 Receives $1,020 from patients on account.
25 Bills patients $2,400 for services performed.
30 Pays the following expenses in cash: Salaries and wages $3,640; miscellaneous office expenses $94. (Record each separately.)
30 Dental supplies used during September, $340.

Record depreciation using a 5-year life on the equipment, the straight-line method, and no salvage value.

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Question & Answer: Listed below are the transactions of John Kawabata, D.D.S., for the month of September...... 1
Question & Answer: Listed below are the transactions of John Kawabata, D.D.S., for the month of September...... 1
Question & Answer: Listed below are the transactions of John Kawabata, D.D.S., for the month of September...... 1
1. Enter the transactions shown above in appropriate general ledger accounts (use T-accounts). Do not use a drawing account.

2. Prepare a trial balance.

3. Prepare an income statement. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

4. Prepare a statement of owner’s equity.

5. Prepare an unclassified balance sheet.

6. Close the ledger.

7. Prepare a post-closing trial balance.

Expert Answer

 

Cash
Owner’s Capital 24270 Rental Expense 728
Service revenue 1790 Supplies 1014
Service revenue 1020 Office expense 500
Accounts payable 3780
Drawings-John 3360
Salaries & Wages 3640
Office expense 94
Balance c/f 13964
27080 27080
Accounts Receivable
Service Revenue 5860 Cash 1020
Service Revenue 2400 Balance c/f 7240
8260 8260
Supplies
Cash 1014 supplies expense 340
Balance c/f 674
1014 1014
Office Expense
Cash 500
Balance c/f 594 Cash 94
594 594
Equipment
Accounts payable 19020
Balance c/f 19020
19020 19020
Drawings- John
Cash 3360 Balance c/f 3360
3360 3360
Accounts payable
Cash 3780 Equipment 19020
Balance c/f 15240
19020 19020
Supples Expense
Supples 340 Balance c/f 340
340 340
Service Revenue
Cash 1790
Accounts Receivable 5860
Balance c/f 10050 Accounts Receivable 2400
10050 10050
Salaries & Wages
Balance c/f 3640 Cash 3640
3640 3640
Owners’ Capital
Balance c/f 24270 Cash 24270
24270 24270
Rental Expense
Cash 728 Balance c/f 728
728 728
Accumulated Depreciation – equipment
Balance c/f 317 Depreciation – equipment 317
317 317
Depreciation – equipment
Accumulated Depreciation – equipment 317 Balance c/f 317
317 317

2)

Trial Balance

Accounts Debit ($) Credit ($)
Cash 13964
Accounts receivables 7240
Supplies 674
Equipment 19020
Accumulated depreciation 317
Accounts payable 15240
Owner’s Capital 24270
Drawings – John 3360
service Revenue 10050
Office Expenses 594
Salaries & Wages 3640
Supplies Expense 340
Depreciation – equipment 317
Rental Expense 728
49877 49877

3)

Income Statement

service Revenue $ 10,050
Office Expenses $         594
Salaries & Wages $     3,640
Supplies Expense $         340
Depreciation – equipment $         317
Rental Expense $         728
Total expenses $ 5,619
Net Income $ 4,431

4)

Statement of Owner’s equity

Beginning Balance $   24,270
Less: Drawings $     3,360
Balance $   20,910
Add: Net Income $     4,431
Ending Balance $   25,341

5)

Balance Sheet

Assets
Current Asset
Cash $   13,964
Accounts receivables $     7,240
Supplies $         674
Total Current asset $   21,878
Equipment $   19,020
Less: Accumulated depreciation $         317
Equipment , Net $   18,703
Total Assets $   40,581
Liabilities & Equity
Current Liabilities
Accounts payable $   15,240
Owner’s equity $   25,341
Total Liabilities & Equity $   40,581

6)

Closing Entries

General Journal debit($) Credit ($)
Income Summary 5619
Office Expenses 594
Salaries & Wages 3640
Supplies Expense 340
Depreciation – equipment 317
Rental Expense 728
(Expenses accounts closed to income summary)
Service Revenue 10050
Incxome Summary 10050
(Revenue account closed to incoe summary)
Owner’s Equity 3360
Drawings-John 3360
(drawings account closed to owner’s equity)
Income Summary 4431
Owner’s equity 4431
(income summary clsoed to Owner’s equity)

7)

Accounts Debit ($) Credit ($)
Cash 13964
Accounts receivables 7240
Supplies 674
Equipment 19020
Accumulated depreciation 317
Accounts payable 15240
Owner’s Capital 25341
Retained Earnings
40898 40898

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