West Laboratory adjusts and closes its accounts at the end of each month. The tr

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West Laboratory adjusts and closes its accounts at the end of each month. The trial balance at September 30, 2010, before adjustments is as follows:

West Laboratory adjusts and closes its accounts at the end of each month.The trial balance at september 30,2010 before adjustment is as fallows: The following information relates to monthend adjustments: Office supplies on hand september 30 amount to $500. The usefull life of the medical equipment was estimated to be 20years with no residual value. Many patients pay in advance for major medical procedures.Fees of $6,000 were earned during the month by performing procedures on patients who had paid in advance. salaries earned by employee during the month but not yet recorded amounted to$2,300. On September 1 West Laboratory had moved and paid 2 months rent in advance. Medical procedures performed during the month but not yet billed or recorded amounted to $4,600. Prepare adjusting entries required at september 30 Set up a worksheet.Using the above trial balance and the adjusting entries you prepared, complete and adjusted trial balance.

Explanation / Answer

a.) Office Supplies on hand Sep 30 amounted to $500
1,200 - 500 = 700
Dr Office Supplies Expense 700
Cr Office Supplies 700
b.) The useful life of the medical equipment was estimated to be 20 years with no residual value.
21,800 / (12 x 20) = $91 (rounded) monthly depreciation
Dr Depreciation Expense--Medical Equipment 91
Cr Accumulated Depreciation--Medical Equipment 91
c.) Many patients pay in advance for major medical procedures. Fees of 6,000 were earned during the month by performing procedures on patients who had paid in advance.
Dr Unearned Medical Fees 6,000
Cr Medical Fees Earned 6,000
d.) Salaries earned by employees during the month but not yet recorded amounted to $2,300.
Dr Salaries Expense 2.300
Cr Salaries Payable 2,300
e.) On Sep 1, West Laboratory had moved and paid 2 months rent in advance.
Dr Rent Expense 2,500
Cr Prepaid Rent 2,500
f.) Medical procedures performed during the month but not yet billed or recorded amounted to $4,600.
Dr Accounts Receivable 4,600
Cr Medical Fees Earned 4,600

Add and subtract these amounts from the trial balance to get your adjusted trial balance.

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