Question

Problem #1 Mr. Blue is a licensed skin doctor. During the first month of the operation of his business, the following events and transactions occurred.

·             April 1 Invested $20,000 cash in his business.

·             1 Hired a secretary-receptionist at a salary of $700 per week payable monthly.

·             2 Paid office rent for the month $1,100.

·             3 Purchased doctor office’s supplies on account from Dazzle Company $4,000.

·             10 Performed medical services and billed insurance companies $5,100.

·             11 Received $1,000 cash advance from Sebastian for the medical service.

·             20 Received $2,100 cash for services performed from James.

·             30 Paid secretary-receptionist for the month $2,800.

·             30 Paid $2,400 to Dazzle for accounts payable due.

Mr. Blue uses the following chart of accounts: No. 101 Cash, No. 112 Accounts Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned Service Revenue, No. 301 Owner’s Capital, No. 400 Service Revenue, No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.

Instructions

(a) Journalize the transactions.

(b) Post to the ledger accounts.

(c) Prepare a trial balance on April 30, 2018

_____________________________________________________________________________________________________

Problem #3 The adjusted trial balance columns of the worksheet for Company, owned by Meteor and Blue, are as follows.

Meteor and Blue’s COMPANY

Worksheet

For the Year Ended December 31, 2018

	Trial Balance
		Dr.	Cr.
101	Cash	5,300
112	Accounts Receivable	10,800
126	Supplies	1,500
130	Prepaid Insurance	2,000
157	Equipment	27,000
158	Accumulated Depreciation		5,600
200	Notes Payable		15,000
201	Accounts Payable		6,100
212	Salaries and Wages Payable		2,400
230	Interest Payable		600
301	Owner’s Capital		13,000
306	Owner’s Drawing	7,000
400	Service Revenue		61,000
610	Advertising Expense	8,400
631	Supplies Expense	4,000
711	Depreciation Expense	5,600
722	Insurance Expense	3,500
726	Salaries and Wages Expense	28,000
905	Interest Expense	600
Totals	103,700	103,700

Instructions

(a) Complete the worksheet by extending the balances to the financial statement columns.

(b) Prepare an income statement, owner’s equity statement, and a balance sheet.

(Note: $5,000 of the notes payable become due in 2019.) D. Thao did not make any additional investments in the business during the year.

(c) Prepare the closing entries.

Answer 1

Ques 1

QUES 2