S2-9 (similar to) Question Help Hazel Garland, MD, opened a medical practice. Th

Question

S2-9 (similar to) Question Help Hazel Garland, MD, opened a medical practice. The business completed the following transactions: Jul 1 Garland invested $34,000 cash to start her medical practice. The business issued common stock to Garland 2 Purchased medical supplies on account totaling $8,600. 3 Paid monthly office rent of $2,500 6 Recorded $8,500 revenue (in cash) for service rendered to patents After these transactions, how much cash does the business have to work with? Use a T-account to show your answer. Begin by posting the transactions, using the date as a posting reference.Then, label and calculate the ending balance, using "Bal as the posting reference. Cash

Explanation / Answer

Cash

Ending balance =34000+8500-2500=40000

Transaction on July 1,3 and 6 are cash transactions

Where as transaction on July 2 is credit transaction which will have no effect on cash account.

Entries

July 1 cash Dr. 34000

Common Stock cr. 34000

July 2 purchase Dr. 8600

Accounts Payable cr. 8600

July 3 rent expense Dr. 2500

Cash cr. 2500

July 6 cash Dr. 8500

Service Revenue cr. 8500

July 1 34000 july 3 2500 July 6 8500 bal 40000 42500 42500

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