Listed below are the transactions of Rock Medical Company (a service company org
ID: 2604575 • Letter: L
Question
Listed below are the transactions of Rock Medical Company (a service company organized as a corporation), for the month of March. Record the following transactions for Rock Medical Company.
Mar 1 Jim Rock invests $50,000 cash in exchange for common stock in
Rock Medical Company.
1 Takes out a $5,000, 30-day short term note payable with an annual
interest rate of 6%.
1 Purchases medical equipment on account from JK Enterprises
for $22,800.
3 Pays rent for office space, $1,500 for the month.
3 Employs a receptionist, Michelle Kwin.
4 Purchases medical supplies for cash, $1,165.
10 Receives cash of $850 from patients for services performed.
15 Bills patients $11,560 for services performed.
21 Pays JK Enterprises on account, $7,600.
26 Receives $2,600 from patients on account.
30 Bills patients $6,890 for services performed.
31 Pays the following expenses in cash: Salaries and
wages $2,500; miscellaneous office expenses $910.
31 Pays principal and interest on the note payable.
31 Medical supplies used during the month, $695.
31 Record depreciation expense on the equipment using the straight line
method; the equipment has a 5-year life and no salvage value.
31 Record utility expense of $200 incurred for the month; bill not
paid at month end
Chart of Accounts:
Cash
Accounts Receivable
Supplies
Equipment
Accumulated Depreciation—Equipment
Accounts Payable
Notes Payable (short term)
Common Stock
Note Payable
Service Revenue
Rent Expense
Office Expense
Salaries and Wages Expense
Supplies Expense
Depreciation Expense
Interest Expense
Utility Expense
Income Summary
Instructions
(a) Prepare journal entries to record the above transactions for Rock Medical Company; journal entries can be hand written or typed in Word/Excel; put on a separate page(s).
(b) Enter the transactions shown above in appropriate general ledger accounts (use T-accounts); t-accounts can be hand written; put on a separate page from journal entries prepared in (a).
(c) Prepare a trial balance in EXCEL; use formulas to total the debits and credits; PRINT on one page.
(d) Prepare an income statement, a statement of retained earnings, and an unclassified balance sheet in EXCEL; use formulas as appropriate; PRINT each on a SEPARATE page
(e) Prepare closing entries and enter the transactions in the T-accounts (from part (b); journal entries can be handwritten or typed in Word/Excel; put on a separate page(s).
(f) Prepare a post-closing trial balance in EXCEL; use formulas to total the debits and credit; PRINT on one page
Explanation / Answer
(a)
(b)
(c)
(d)
(e)
(f)
Rock Medical Company Journal entries for the month of March Date Account title Debit Credit Mar.1 Cash 50000 Common stock 50000 (Cash invested ) Mar.1 Cash 5000 Note payable (short term) 5000 (6% short term note payble taken) Mar.1 Equipment 22800 Accounts payable 22800 (Equipment purchased on account) Mar.3 Rent expense 1500 Cash 1500 (Payment of rent for the month) Mar.4 Supplies 1165 Cash 1165 (Purchase of supplies for cash) Mar.10 Cash 850 Service revenue 850 (Cash received for service performed) Mar.15 Accounts receivable 11560 Service revenue 11560 (Billing for service performed) Mar.21 Accounts payable 7600 Cash 7600 (Payment made on account) Mar.26 Cash 2600 Accounts receivable 2600 (Cash received from customers) Mar.30 Accounts receivable 6890 Service revenue 6890 (Billing for service performed) Mar.31 Salaries and wages expense 2500 Office expenses 910 Cash 3410 Mar.31 Note payable (short term) 5000 Interest expense 25 Cash 5025 (Payment of principal and interest for note payable) Mar.31 Supplies expense 695 Supplies 695 (Medical supplies used during the month) Mar.31 Depreciation expense 380 Accumulated depreciation - equipment 380 (Depreciation on equipment - 5 year life no salvage) Mar.31 Utilities expense 200 Accounts payable 200 (Utilities expense for the month)Related Questions
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