Question

Listed below are the transactions of Morgan Kawabata, D.D.S., for the month of September.

Sept. 1		Kawabata begins practice as a dentist and invests $ 23,340 cash.
2		Purchases dental equipment on account from Green Jacket Co. for $ 18,180.
4		Pays rent for office space, $ 798 for the month.
4		Employs a receptionist, Michael Bradley.
5		Purchases dental supplies for cash, $ 1,036.
8		Receives cash of $ 1,740 from patients for services performed.
10		Pays miscellaneous office expenses, $ 520.
14		Bills patients $ 6,760 for services performed.
18		Pays Green Jacket Co. on account, $ 4,690.
19		Withdraws $ 3,550 cash from the business for personal use.
20		Receives $ 999 from patients on account.
25		Bills patients $ 2,530 for services performed.
30		Pays the following expenses in cash: Salaries and wages $ 3,760; miscellaneous office expenses $92. (Record each separately.)
30		Dental supplies used during September, $ 400.

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

1a. Enter the transactions shown above in appropriate general ledger accounts (use T-accounts). Do not use a drawing account. (Post entries in the order displayed in the problem statement.)

1b. Prepare a trial balance.

1c. Prepare an income statement. (Enter loss using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

1d. Prepare a statement of owner’s equity. (List items that increase owner's equity first.)
1e. Prepare an unclassified balance sheet. (List assets in order of liquidity.)
1f. Close the ledger. (Post entries in the order as displayed in the problem statement.)
1g. Prepare a post-closing trial balance.

Answer 1

Part 1a and 1f

Cash A/c

Date	Particular	$	Date	Particular	$
Sept. 1 Sept. 8 Sept. 20	To Capital A/c To Fees A/c To Patients A/c	23,340 1,740 999	Sept. 4 Sept. 5 Sept. 10 Sept. 18 Sept. 30 Sept. 30 Sept. 30	By Rent A/c By Dental supplies A/c By Miscellaneous office expenses By Green Jacket co By Salary & Wages By Miscellaneous office expenses By Balance c/d	798 1036 520 4,690 3,760 92 15,183
		26,079			26,079

Capital A/c

Date	Particular	$	Date	Particular	$
Sept.19 Sept. 30	To Cash To Balance c/d	3,550 19,790	Sept. 1	By Cash	23,340
		23,340			23,340

Dental Equipment A/c

Date	Particular	$	Date	Particular	$
Sept. 2	To Green jacket co.	18,180	Sept. 30	By Depreciation (18180÷5 years÷ 12 months) By Balance c/d	303 17,877
		18,180			18,180

Green Jacket co

Date	Particular	$	Date	Particular	$
Sept.18 Sept.30	To Cash To Balance c/d	4,690 13,490	Sept. 2	By Dental Equipment A/c	18,180
		18,180			18,180

Rent A/c

Date	Particular	$	Date	Particular	$
Sept. 4	To Cash A/c	798	Sept. 30	By Balance c/d	798
		798			798

Dental Supplies A/c

Date	Particular	$	Date	Particular	$
Sept. 5	To Cash A/c	1036	Sept. 30	By Dental supplies consumption By Balance C/d	400 636
		1036			1036

Fees A/c

Date	Particular	$	Date	Particular	$
Sept. 30	To Balance c/d	11,030	Sept.8 Sept.14 Sept.25	By Cash By Patients By Patients	1,740 6,760 2,530
		11,030			11,030

Miscellaneous office expenses

Date	Particular	$	Date	Particular	$
Sept.10 Sept.30	To Cash To Cash	520 92	Sept.30	By Balance c/d	612
		612			612

Patients A/c

Date	Particular	$	Date	Particular	$
Sept.14 Sept.25	To Fees A/c To Fees A/c	6,760 2,530	Sept.20 Sept.30	By Cash By Balance c/d	999 8,291
		9,290			9,290

Salary & Wages

Date	Particular	$	Date	Particular	$
Sept.30	To Cash	3,760	Sept.30	By Balance cd	3,760
		3,760			3,760

Dental Supplies consumption A/c

Date	Particular	$	Date	Particular	$
Sept.30	To Dental supplies	400	Sept.30	By Balance c/d	400
		400			400

Part 1b

Trial Balance

Particular	Dr($)	Cr($)
Capital A/c		19,790
Green Jacket co		13,490
Fees		11,030
Cash	15283
Dental equipment	18180
Patients	8291
Rent	798
Dental supplies purchase	1036
Miscellaneous office expenses	612
Salary & Wages	3760
	44,310	44,310

Part 1c

Particular	$
Fees	11030
Dental supplies consumption	-400
Salary & Wages	-3760
Rent	-798
Miscellaneous office expenses	-612
Depreciation	-303
Net income	5157