Drs. Glenda Feleltham and Greg Enderwist began operations of their physical ther

Question

Drs. Glenda Feleltham and Greg Enderwist began operations of their physical therapy clinic called Physical Therapy for All Bodies on January 1, 2016. The annual reporting period ends December 31. The trial balance on January 1, 2016, was as follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Cash Accounts Receivabile Dobit Credit S 7 Equipment Accumulated Deprecistion (equipment Other Assets Accounts Payable Notes Payable Wages Peysible nterest Payable Income Taxes Payable 15 Retained Eamngs Dividends Declared Service Revere Depreciation Expense Interest Expense Operating Expenses Totals $25 Transactions during 2016 (summarized in thousands of dellars) follow: a. Borrowed S22 cash on January 1, signing a six-month note payable. b. Purchased equipment for $25 cash on January I c Issued additional shares of stock for $5 on January 15. d. Earned January revenues of $55, including $8 on credit and $47 received in cash. e. Recognized January operating expenses of s30, inclading $5 bought on credit and $25 purchased with cash. f Purchased other assets in January paying $3 cash. & Collected accounts receivable in January of $S9 h Paid accounts payable of $10

Explanation / Answer

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1 & 2 Trail balance of Physical therophy as on January 1, 2016 Beginning balance Adjustments Ending balances Account title Debit Credit Debit Credit Debit Credit Cash $7,000 86000 67000 $26,000 Account receivable $3,000 8000 9000 $2,000 Supplies $3,000 7000 $10,000 Equipment $6,000 25000 $31,000 Accumuated depreciation (Equipment) $1,000 $1,000 Other assets $6,000 3000 $9,000 Account payable $5,000 10000 12000 $7,000 Notes payable $0 22000 $22,000 Wages payable $0 $0 Interest payable $0 $0 Income tax payable $0 $0 Unearned revenue $0 3000 $3,000 Contributed capital $15,000 5000 $20,000 Retained earnings $4,000 $4,000 Dividend declared $0 4000 $4,000 Service revenue $0 55000 $55,000 Depreciation expenses $0 $0 $0 Income tax expenses $0 $0 $0 Interest expenses $0 $0 $0 Operating expenses $0 30000 $30,000 Total $25,000 $25,000 $173,000 $173,000 $112,000 $112,000 3&4 Journal entries Account tiltle Debit Credit a Cash $22,000 To note payable $22,000 b Equipment $25,000 To Cash $25,000 c Cash $5,000 Contributed capital $5,000 d Cash $47,000 Account receivable $8,000 To Service revenue $55,000 e Operating expenses $30,000 To Cash $25,000 To Accounts payable $5,000 f Other assets $3,000 To Cash $3,000 g Cash $9,000 To Accounts receivable $9,000 h Accounts payable $10,000 To acsh $10,000 i Supples $7,000 To Accounts payable $7,000 j Cash $3,000 To Unearned revenue $3,000 k Dividend declared $4,000 Cash $4,000

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