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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

D. Johnston, a physical therapist, opened Johnston’s Clinic. His accountant provided the following chart of accounts:

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The following transactions occurred during July of this year:

  1. a. Johnston deposited $35,000 in a bank account in the name of the business.
  2. b. Bought filing cabinets on account from Muller Office Supply, $560.
  3. c. Paid cash for chairs and carpeting for the waiting room, $835, Ck. No. 1000.
  4. d. Bought a photocopier from Rob’s Office Equipment, $650, paying $250 in cash and placing the balance on account, Ck. No. 1001.
  5. e. Received and paid the telephone bill, which included installation charges, $185, Ck. No. 1002.
  6. f. Sold professional services on account, $2,255.
  7. g. Received and paid the bill for the state physical therapy convention, $445, Ck. No. 1003.
  8. h. Received and paid the electric bill, $335, Ck. No. 1004.
  9. i. Received cash on account from credit customers, $1,940.
  10. j. Paid on account to Muller Office Supply, $250, Ck. No. 1005.
  11. k. Paid the office rent for the current month, $1,245, Ck. No. 1006.
  12. l. Sold professional services for cash, $1,950.
  13. m. Paid the salary of the receptionist, $960, Ck. No. 1007.
  14. n. Johnston withdrew cash for personal use, $1,200, Ck. No. 1008.

Required

  1. 1. Record the owner’s name in the Capital and Drawing T accounts.
  2. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts.
  3. 3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction.
  4. 4. Foot the T accounts and show the balances.
  5. 5. Prepare a trial balance as of July 31, 20--.
  6. 6. Prepare an income statement for July 31, 20--.
  7. 7. Prepare a statement of owner’s equity for July 31, 20--.
  8. 8. Prepare a balance sheet as of July 31, 20--.

1.

To determine

Record the owners’ name in the Capital and drawing T-accounts.

Explanation

T-account:

T-account is the form of the ledger account, where the journal entries are posted to this account. It is referred to as the T-account, because the alignment of the co...

2, 3 & 4

To determine

Correctly place the plus and minus signs for each T-account and label the debit and credit sides of the accounts, Record the transactions in the T-accounts and write the letter of each entry to identify the transaction and show the balances.

5.

To determine

Prepare a trial balance as of July 31.

6.

To determine

Prepare an income statement for July 31.

7.

To determine

Prepare a statement of owners’ equity for July 31.

8.

To determine

Prepare a balance sheet as of July 31.

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