Practice Problem 1 On August 31, the balance sheet of La Brava Veterinary Clinic

Question

Practice Problem 1

On August 31, the balance sheet of La Brava Veterinary Clinic showed Cash $11,000, Accounts Receivable $3,700, Supplies $600, Equipment $6,000, Accounts Payable $5,600, Common Stock $14,850, and Retained Earnings $850. During September, the following transactions occurred.

1. Paid $2,350 cash for accounts payable due.
2. Collected $2,000 of accounts receivable.
3. Purchased additional equipment for $3,050, paying $900 in cash and the balance on account.
4. Recognized revenue of $8,100, of which $3,500 is collected in cash and the balance is due in October.
5. Declared and paid a $1,400 cash dividend.
6. Paid salaries $2,300, rent for September $1,100, and advertising expense $100.
7. Incurred utilities expense for month on account $330.
8. Received $14,500 from Capital Bank on a 6-month note payable.

Prepare a tabular analysis of the September transactions beginning with August 31 balances. (If a transaction causes a decrease in Assets, Liabilities or Stockholders' Equity, place a negative sign (or parentheses) in front of the amount entered for the particular Asset, Liability or Equity item that was reduced. See Illustration 1-8 for example.)

LA BRAVA VETERINARY CLINIC
Assets Liabilities Stockholders' Equity
   
Cash
+
Accounts
Receivable
+
Supplies
+
Equipment
=
Notes
Payable
+
Accounts
Payable
+
Common
Stock
+
Retained
Earnings
+
Revenues
–
Expenses
–
Dividends
Bal.     $
$
$
$
$
$
$
$
$
$
$

1.

2.

3.

4.

5.

6.

7.

8.










$
$
$
$
= $
$
$
$
$
$
$

SHOW LIST OF ACCOUNTS
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Prepare an income statement for September.

LA BRAVA VETERINARY CLINIC
Income Statement

For the Year Ended September 30, 2017
For the Month Ended September 30, 2017
September 30, 2017

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$
    
Dividends    
Expenses    
Net Income / (Loss)    
Retained Earnings, September 1    
Retained Earnings, September 30    
Revenues    
Total Expenses    
Total Revenues    
Investments    

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

SHOW LIST OF ACCOUNTS
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LINK TO TEXT

Prepare a retained earnings statement for September. (List items that increase retained earnings first.)

LA BRAVA VETERINARY CLINIC
Retained Earnings Statement

September 30, 2017
For the Month Ended September 30, 2017
For the Year Ended September 30, 2017

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

Add
Less
:

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments

Add
Less
:

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments

Dividends
Expenses
Net Income / (Loss)
Retained Earnings, September 1
Retained Earnings, September 30
Revenues
Total Expenses
Total Revenues
Investments
$

SHOW LIST OF ACCOUNTS
LINK TO TEXT
LINK TO TEXT
LINK TO TEXT

Prepare a balance sheet at September 30. (List Assets in order of liquidity.)

LA BRAVA VETERINARY CLINIC
Balance Sheet

September 30, 2017
For the Year Ended September 30, 2017
For the Month Ended September 30, 2017
Assets
$
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$
Liabilities and Stockholders’ Equity

Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Property, Plant and Equipment
Stockholders' Equity
Total Assets
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Property, Plant and Equipment
Total Stockholders' Equity
$
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$

Liabilities
Intangible Assets
Long-term Investments
Long-term Liabilities
Property, Plant and Equipment
Stockholders' Equity
Total Assets
Total Intangible Assets
Total Liabilities
Total Liabilities and Stockholders' Equity
Total Long-term Investments
Total Long-term Liabilities
Total Property, Plant and Equipment
Total Stockholders' Equity
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
    
Liabilities    
Intangible Assets    
Long-term Investments    
Long-term Liabilities    
Property, Plant and Equipment    
Stockholders' Equity    
Total Assets    
Total Intangible Assets    
Total Liabilities    
Total Liabilities and Stockholders' Equity    
Total Long-term Investments    
Total Long-term Liabilities    
Total Property, Plant and Equipment    
Total Stockholders' Equity    
$

SHOW LIST OF ACCOUNTS
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LINK TO TEXT
LINK TO TEXT

Explanation / Answer

2)

3)

4)

Asset Liabilities equity Retained earning cash Accounts receivable supplies equipment note payable accounts payable common stock Retained earning Revenue expense dividend Beginning balance 11000 3700 600 6000 5600 14850 850 1 -2350 -2350 2 2000 -2000 3 -900 3050 2150 [3050-900] 4 3500 4600 [8100-3500] 8100 8100 5 -1400 -1400 1400 6 -3500 [2300+1100+100] -3500 3500 7 330 -330 330 8 14500 14500 Ending balance 22850 6300 600 9050 14500 5730 14850 3720 8100 3830 1400

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