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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: 1. Briefly discuss the circumstances under which special journals would be used in place of a two-column (all-purpose) journal. Include in your answer your recommendations 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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Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124

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BuyFindarrow_forward

Financial Accounting

15th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781337272124
Chapter 5, Problem 6CP
Textbook Problem
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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:

Chapter 5, Problem 6CP, For the past few years, your client, Omni Care, has operated a small medical practice. Omni Cares

  1. 1. Briefly discuss the circumstances under which special journals would be used in place of a two-column (all-purpose) journal. Include in your answer your recommendations for Omni Care’s medical practice.
  2. 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. 3. Which subsidiary ledgers would you recommend for the medical practice?

1.

To determine

Discuss the circumstances under which special journals would be used in place of a two-column journal.

Explanation of Solution

Special journal: Special journal refers to the journal that is used to record a single kind of transaction which occurs frequently. It is one of the methods in a manual system that is used to processing the financial transactions more efficiently.

Usually, a special journal is created when a specific type of transacti...

2.

To determine

Prepare format for revenue journal and purchase journal.

3.

To determine

Recommend subsidiary ledger which is suitable for the medical practice.

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Chapter 5 Solutions

Financial Accounting
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Ch. 5 - The following revenue transactions occurred during...Ch. 5 - The following revenue transactions occurred during...Ch. 5 - The debits and credits from two transactions are...Ch. 5 - The debits and credits from two transactions are...Ch. 5 - The following purchase transactions occurred...Ch. 5 - The following purchase transactions occurred...Ch. 5 - The debits and credits from two transactions are...Ch. 5 - The debits and credits from two transactions are...Ch. 5 - McHale Company does business in two customer...Ch. 5 - Back Country Life, Inc., does business in two...Ch. 5 - Using the following revenue journal for Bowman...Ch. 5 - Based on the data presented in Exercise 5-1,...Ch. 5 - Assuming the use of a two-column (all-purpose)...Ch. 5 - Assuming the use of a two-column (all-purpose)...Ch. 5 - The debits and credits from three related...Ch. 5 - Horizon Consulting Company had the following...Ch. 5 - The revenue journal for Sapling Consulting Inc....Ch. 5 - The revenue and cash receipts journals for Polaris...Ch. 5 - Transactions related to revenue and cash receipts...Ch. 5 - Lasting Summer Inc. has 2,510 in the October 1...Ch. 5 - Using the following purchases journal, identify...Ch. 5 - Using the following cash payments journal,...Ch. 5 - The debits and credits from three related...Ch. 5 - Guardian Services Inc. had the following...Ch. 5 - The purchases journal for Newmark Exterior...Ch. 5 - The cash payments and purchases journals for...Ch. 5 - Transactions related to purchases and cash...Ch. 5 - Happy Tails Inc. has a September 1, 20Y4, accounts...Ch. 5 - After Bunker Hill Assay Services Inc. had...Ch. 5 - Pinnacle Consulting Company makes most of its...Ch. 5 - The following cash receipts journal headings have...Ch. 5 - Most computerized accounting systems use...Ch. 5 - Apple Inc.s iTunes provides digital products, such...Ch. 5 - For each of the following companies, determine...Ch. 5 - Starbucks Corporation reported the following...Ch. 5 - Twenty-First Century Fox, Inc. is one of the...Ch. 5 - The comparative segment revenues for Yum! Brands,...Ch. 5 - Sage Learning Centers was established on July 20...Ch. 5 - Transactions related to revenue and cash receipts...Ch. 5 - Sterling Forest Landscaping designs and installs...Ch. 5 - AquaFresh Water Testing Service was established on...Ch. 5 - The transactions completed by Revere Courier...Ch. 5 - Guardian Security Services was established on...Ch. 5 - Transactions related to revenue and cash receipts...Ch. 5 - Plumb Line Surveyors provides survey work for...Ch. 5 - West Texas Exploration Co. was established on...Ch. 5 - The transactions completed by AM Express Company...Ch. 5 - Ethics in Action Netbooks Inc. provides accounting...Ch. 5 - Internet-based accounting software is a recent...Ch. 5 - The following conversation took place between...Ch. 5 - A subsidiary ledger is used for accounts...Ch. 5 - For the past few years, your client, Omni Care,...

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