For the past few years, your client, Omni Care, has operated a small medical practice.Omni Care's current annual revenues are $945,000. Because the accountant has beenspending more time each month recording all transactions in a two-column journal andpreparing the financial statements, Omni Care is considering improving the accountingsystem by adding special journals and subsidiary ledgers. Omni Care has asked you tohelp with this project and has compiled the following information:EstimatedFrequency perMonthType of TransactionFees earned on account240Purchase of medical supplies on account190Cash receipts from patients on account175Cash payments on account160Cash receipts from patients at time services are providedPurchase of office supplies on account12035Purchase of magazine subscriptions on accountPurchase of medical equipment on account4Cash payments for office salaries3Cash payments for utilities expenseBriefly discuss the circumstances under which special journals would be used1.in place of a two-column (all-purpose) journal. Include in your answer your recom-mendations for Omni Care's medical practice.2. Assume that Omni Care has decided to use a revenue journal and a purchases journal.Design the format for each journal, giving special consideration to the needs of themedical practice.3. Which subsidiary ledgers would you recommend for the medical practice?

Question
Asked Dec 9, 2019
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For the past few years, your client, Omni Care, has operated a small medical practice.
Omni Care's current annual revenues are $945,000. Because the accountant has been
spending more time each month recording all transactions in a two-column journal and
preparing the financial statements, Omni Care is considering improving the accounting
system by adding special journals and subsidiary ledgers. Omni Care has asked you to
help with this project and has compiled the following information:
Estimated
Frequency per
Month
Type of Transaction
Fees earned on account
240
Purchase of medical supplies on account
190
Cash receipts from patients on account
175
Cash payments on account
160
Cash receipts from patients at time services are provided
Purchase of office supplies on account
120
35
Purchase of magazine subscriptions on account
Purchase of medical equipment on account
4
Cash payments for office salaries
3
Cash payments for utilities expense
Briefly discuss the circumstances under which special journals would be used
1.
in place of a two-column (all-purpose) journal. Include in your answer your recom-
mendations for Omni Care's medical practice.
2. Assume that Omni Care has decided to use a revenue journal and a purchases journal.
Design the format for each journal, giving special consideration to the needs of the
medical practice.
3. Which subsidiary ledgers would you recommend for the medical practice?
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For the past few years, your client, Omni Care, has operated a small medical practice. Omni Care's current annual revenues are $945,000. Because the accountant has been spending more time each month recording all transactions in a two-column journal and preparing the financial statements, Omni Care is considering improving the accounting system by adding special journals and subsidiary ledgers. Omni Care has asked you to help with this project and has compiled the following information: Estimated Frequency per Month Type of Transaction Fees earned on account 240 Purchase of medical supplies on account 190 Cash receipts from patients on account 175 Cash payments on account 160 Cash receipts from patients at time services are provided Purchase of office supplies on account 120 35 Purchase of magazine subscriptions on account Purchase of medical equipment on account 4 Cash payments for office salaries 3 Cash payments for utilities expense Briefly discuss the circumstances under which special journals would be used 1. in place of a two-column (all-purpose) journal. Include in your answer your recom- mendations for Omni Care's medical practice. 2. Assume that Omni Care has decided to use a revenue journal and a purchases journal. Design the format for each journal, giving special consideration to the needs of the medical practice. 3. Which subsidiary ledgers would you recommend for the medical practice?

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Revenue Journal Invoice No. Account debited Post Ref. Accounts receivable Dr ($) Fees earned Cr. ($) Date Purchase Journal Accounts credited Post Ref. Accounts payable Cr. Medical supplies Dr. office Supplies Dr. other accounts Dr. Post Ref. Amounts Date

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