3 Chapter Example #1
3131
1. Dental Services, Inc. opened business September 1st of the year. Dr. Smith invests $20,000 cash in the business and receives 20,000 shares of $1.00 par common stock. 2. September 2nd: Purchased furniture and dental equipment on account for $17,280 from ABC. Co. 3. September 4th: Paid $680 in rent. 4. September 5th: Purchased supplies for cash, $942 5. September 8th: Receives $1690 from patients for dental services 6. September 10th: Pays miscellaneous office expenses $430 7. September 14th: Bills patients $5120 for services performed 8. September 18th: Pays $3600 to ABC company on Account. 9. September 20th: Receives $980 from patients on account 10. September 25th: Bills patients $2110 for services performed 11. September 30th: Pays the following expenses in cash: Office salaries $1400, Miscellaneous Office Expense $85 12. September 30th: Paid $300 dividend to stockholder. Adjusting entries: 1) Dental supplies at the end of the month are inventoried and are $612. 2) Depreciation expense is recorded for September. Use a 5 year life on the asset. 3) A $500 utility bill for September was received but will be paid in October. Prepare journal entries for all transactions. Post journal entries to the accounts in the ledger and prepare a preliminary trial balance. Make the adjusting entries to the accounts and update the balances of affected accounts in the ledger. Prepare an adjusted trial balance. Prepare the income statement, balance sheet and statement of retained earnings. Make the closing entries. Prepare a post closing trial balance.
Journal Entries: Date Account 1-Sep Cash Common Stock 2-Sep Furniture & Equipment A/P 4-Sep Rent Expense Cash 5-Sep Supplies Cash 8-Sep Cash Service Revenue 10-Sep Office Expenses Cash 14-Sep A/R Service Revenue 18-Sep A/P Cash 19-Sep Dividends Cash 20-Sep Cash A/R 25-Sep A/R Service Revenue 30-Sep Salary Expense Office Expenses Cash ADJUSTING ENTRIES Supplies 30-Sep Expense 1400 85 1485 330 2110 2110 980 980 300 300 430 430 5120 5120 3600 3600 1690 1690 17280 17280 680 680 942 942 DR 20000 20000 CR
Supplies 30-Sep Depreciation Expense Accumulated Depr. 30-Sep Utility Expense Utilities Payable CLOSING ENTRIES 30-Sep Service Revenue Income Summary 30-Sep Income Summary Office Expense Salary Expense Rent Expense Supplies Expense Depreciation Expense Utilities Expense 30-Sep Retained Earnings Dividends 30-Sep Income Summary Retained Earnings
330 288 288 500 500 8920 8920 3713 515 1400 680 330 288 500 300 300 5207 5207
T-Accounts: Cash 20000 1690 980
680 942 430 3600 300 1485
Accounts Receivable 5120 980 2110
Furn & Equipment 17280
6250
17280
15233 Acc. Depreciation Supplies 942 Accounts Payable 17280 3600 330 13680
0 288 288 Utilities Payable
942 612
Common Stock 20000
Dividends 300
0 500 500 Retained Earnings
20000
300
Supplies Expense
Rent Expense 680
0 5207
0 330 330 Utilities Expense
680 330 Salary Expense 1400
680
Office Expense 430
85 515 515 0 500 500 1400 500 Depreciation Expense 288 1400
Income Summary 3713 8920 5207 0
Service Revenue 1690 5120 2110 8920 8920
288
288
Trial Balances: Unadjusted Trial Balance (before adjusting entries) Adjustments DR CR DR CR Cash 15233 A/R 6250 Supplies 942 Equipment 17280 Acc. Depreciation A/P 13680 Utilities Payable Common Stock 20000 Dividends 300 Service Revenue 8920 Office Expense 515 Salary Expense 1400 Rent Expense 680 Supplies Expense 330 Utilities Expense 500 Depreciation Expense 288 Income Summary Retained Earnings Total 42600 42600 1118
Adjusted Trial Balance Closing Entries DR CR DR CR 15233 6250 330 612 17280 288 288 13680 500 500 20000 300 8920 8920 515 1400 680 330 500 288 0 8920 0 300 1118 43388 43388 18140
Post Closing Trial Balance 15233 6250 612 17280 288 13680 500 20000 300 515 1400 680 330 500 288 8920 5207 18140 0 0 0 0 0 0 0 0 0 4907 39375
39375
Expense
Trial Balance