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In: Accounting

Practice Problem 1 On August 31, the balance sheet of La Brava Veterinary Clinic showed Cash...

Practice Problem 1

On August 31, the balance sheet of La Brava Veterinary Clinic showed Cash $11,000, Accounts Receivable $3,700, Supplies $600, Equipment $6,000, Accounts Payable $5,600, Common Stock $14,850, and Retained Earnings $850. During September, the following transactions occurred.

1. Paid $2,350 cash for accounts payable due.
2. Collected $2,000 of accounts receivable.
3. Purchased additional equipment for $3,050, paying $900 in cash and the balance on account.
4. Recognized revenue of $8,100, of which $3,500 is collected in cash and the balance is due in October.
5. Declared and paid a $1,400 cash dividend.
6. Paid salaries $2,300, rent for September $1,100, and advertising expense $100.
7. Incurred utilities expense for month on account $330.
8. Received $14,500 from Capital Bank on a 6-month note payable.

Prepare a tabular analysis of the September transactions beginning with August 31 balances. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 1-8 for example.)

LA BRAVA VETERINARY CLINIC
Assets Liabilities Stockholders' Equity
   
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Notes
Payable
+
Accounts
Payable
+
Common
Stock
+
Retained
Earnings
+
Revenues
–
Expenses
–
Dividends
Bal.     $
$
$
$
$
$
$
$
$
$
$

1.

2.

3.

4.

5.

6.

7.

8.










$
$
$
$
= $
$
$
$
$
$
$

SHOW LIST OF ACCOUNTS
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Prepare an income statement for September.

LA BRAVA VETERINARY CLINIC
Income Statement

For the Year Ended September 30, 2017
For the Month Ended September 30, 2017
September 30, 2017

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$
    
Dividends    
Expenses    
Net Income / (Loss)    
Retained Earnings, September 1    
Retained Earnings, September 30    
Revenues    
Total Expenses    
Total Revenues    
Investments    

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

SHOW LIST OF ACCOUNTS
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT

Prepare a retained earnings statement for September. (List items that increase retained earnings first.)

LA BRAVA VETERINARY CLINIC
Retained Earnings Statement

September 30, 2017
For the Month Ended September 30, 2017
For the Year Ended September 30, 2017

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

Add
Less
:

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments

Add
Less
:

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

SHOW LIST OF ACCOUNTS
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT

Prepare a balance sheet at September 30. (List Assets in order of liquidity.)

LA BRAVA VETERINARY CLINIC
Balance Sheet

September 30, 2017
For the Year Ended September 30, 2017
For the Month Ended September 30, 2017
Assets
$
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$
Liabilities and Stockholders’ Equity

Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Property, Plant and Equipment
Stockholders' Equity
Total Assets
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Property, Plant and Equipment
Total Stockholders' Equity
$
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$

Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Property, Plant and Equipment
Stockholders' Equity
Total Assets
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Property, Plant and Equipment
Total Stockholders' Equity
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$

SHOW LIST OF ACCOUNTS
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT

Solutions

Expert Solution

Preparing Tabular Analysis of September Transaction:-

LA BRAVA VETERINARY CLINIC

No. Assets = Liabilities + Stockholders Equity
Cash + Accounts Receivable + Supplies + Equipment = Accounts Payable + Notes Payable + Common Stock + Retained Earnings - Dividends + Revenue - Expenses
Beg.Bal. $11,000 + $3,700 + $600 + $6,000 = $5,600 + + 14,850 + $850 - + -
1. (2,350) + + + = (2,350) + + + - + -
2. 2,000 + (2,000) + + = + + + - + -
3. (900) + + + 3,050 = 2,150 + + + - + -
4. 3,500 + 4,600 + + = + + + - + 8,100 -
5. (1,400) + + + = + + + - 1,400 + -
6. (3,500) + + + = + + + - + - 3,500
7. + + + = 330 + + + - + - 330
8. 14,500 + + + = + 14,500 + + - + -
Bal. $22,850 + $6,300 + $600 + $9,050 = $5,730 + $14,500 + $14,850 + $850 - $1,400 + $8,100 - $3,830

Preparing Trial Balance from above balances:-

LA BRAVA VETERINARY CLINIC

Trial Balance

September 30

Accounts Debit Credit
Cash $22,850
Accounts Receivable 6,300
Supplies 600
Equipment 9,050
Accounts Payable $5,730
Notes Payable 14,500
Common Stock 14,850
Retained Earnings 850
Dividends 1,400
Revenue 8,100
Salaries Expense 2,300
Rent Expense 1,100
Advertising Expense 100
Utilities Expense 330
Totals $44,030 $44,030

Preparing Financial Statements:-

LA BRAVA VETERINARY CLINIC

I​​​​​​Income Statement

For the Year Ended September 30,2017

Accounts Amount Amount
Revenue $8,100
Less:- Expenses
Salaries Expense $2,300
Rent Expense 1,100
Advertising Expense 100
Utilities Expense 330
Total Expenses $(3,830)
Net Income $4,270

LA BRAVA VETERINARY CLINIC

Statement of Retained Earnings

For the Year Ended September 30,2017

Accounts Amount
Retained Earnings $850
Add:- Net Income 4,270
$5,120
Less:- Dividends (1,400)
Retained Earnings, Ending $3,720

LA BRAVA VETERINARY CLINIC

Balance Sheet

September 30,2017

Accounts Amount Amount
Assets:-
Current Assets:-
Cash $22,850
Accounts Receivable 6,300
Supplies 600
Total Current Assets $29,750
Property, Plant and Equipment:-
Equipment $9,050
Total Property, Plant and Equipment $9,050
Total Assets $38,800
Liabilities and Stockholders Equity:-
Current Liabilities:-
Accounts Payable $5,730
Notes Payable (due in 6- months) 14,500
Total Current Liabilities $20,230
Stockholders Equity:-
Common Stock $14,850
Retained Earnings, Ending 3,720
Total Stockholders Equity $18,570
Total Liabilities and Stockholders Equity $38,800

ekkarill92 answered 2 years ago
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