Bookkeeping question: Prepare entries including adjusting entries. January 1, 20

Question

Bookkeeping question: Prepare entries including adjusting entries.

January 1, 2012 is the first day of operations for Almaden Health Services. The following items summarize the 2012 financial events for the company: On January 1, 2012 common stock was issued to equity investors for $10,000. A 5% SBA loan of $30,000 was received on January 2, 2012. The loan is to be repaid on January 2, 2013. Paid $25,000 for furniture and medical equipment on January 3, 2012. During 2012, $40,000 was paid for miscellaneous operating activities. All of these payments were made in cash. The payments were for a combination of services and medical supplies. Almaden inventories its medical supplies. $6,000 of medical supplies was on hand at December 31, 2012. During 2012, Almaden billed its patients $60,000 for services provided. On December 31, 2012, the patients still owed $7,000. The furniture and equipment is being depreciated over 5 years using the straight-line depreciation method. Items received in the first half of a month are charged a full month's depreciation expense. Almaden annually pays cash dividends to its owners equal to 30% of not income. Almaden is an income tax-exempt business.

Explanation / Answer

Almaden Health Service Journal entries Date Particular Amount (DR) Amount (CR) $ 40,909.00 Cash A/c $               10,000.00       Common Stock $               10,000.00 $ 40,910.00 Cash A/C $               30,000.00       Loan $               30,000.00 $ 40,910.00 Interest A/c $                 1,500.00 Loan $                  1,500.00 $ 40,911.00 Furniture & Medical Equipment $               25,000.00       Cash $               25,000.00 $    2,012.00 Service and medical supplies $               40,000.00     Cash $               40,000.00 $ 41,274.00 Inventory Expenses $               34,000.00      Inventory $               34,000.00 $ 41,274.00 Cash A/c $               53,000.00 Accounts Receivable $                 7,000.00       Service Revenue $               60,000.00 $ 41,274.00 Depreciation Expense $                 5,000.00     Accumulated Depreciation $                  5,000.00 $ 41,274.00 Dividnds $                 5,850.00      Cash $                  5,850.00 Working Net Income Service Revenue $               60,000.00 Closing inventory $                 6,000.00 Less: Service and medical supplies $               40,000.00 Less: Dpreciation $                 5,000.00 Less: Interest $                 1,500.00 Net Income $               19,500.00

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.