Accounting 2000 - Chapter 4 Class Problems

School: Louisiana State University - Course: CM 3000 - Subject: Accounting

Accounting 2000 Chapter 4 Class Problems Problem 1 Prepare adjustments Al Medina, D.D.S., opened an incorporated dental practice on January 1, 2017. During the first month of operations, the following transactions occurred. 1. Performed services for patients who had dental plan insurance. At January 31, $760 of such services was completed but not yet billed to the insurance companies. 2. Utility expenses incurred but not paid prior to January 31 totaled $450. 3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing a $60,000, 3-year note payable (interest is paid each December 31). The equipment depreciates $400 per month. Interest is $500 per month. 4. Purchased a 1-year malpractice insurance policy on January 1 for $24,000. 5. Purchased $1,750 of dental supplies (recorded as increase to Supplies). On January 31, determined that $550 of supplies were on hand. Page 1 of 10

Accounting 2000 Chapter 4 Class Problems Instructions Prepare the adjustments on January 31 and record them in the tabular summary that follows. BALANCE SHEETIncome Statement Assets=Liabilities+Stockholders' Equity CommonStock+ Retained Earnings Revenue-Exp-Div AcctRecSuppPrepaidInsEquipAD=Acct PayInterest Pay A1760760Service revenue A2450(450)Utilities expense A3(400)(400)Depreciation expense 500(500)Interest expense A4(2000)(2000)Insurance expense A5(1200)(1200)Supply expense