Question

Problem 1 Kat's Cat Klinic had the following balance sheet as of December 31, 2018: Assets: Liabilities and Stockholders' Equity *Cash $ 211,000 Accounts Payable 37,000 Accounts Receivable $95,000 Salaries Payable 19,300 x Less Allowance (6,300) 88,700 Utilities Payable 3,200 Prepaid Insurance 27,000 Interest Payable 4,100 Supplies 31,000 Unearned Revenue 16,800 A Building $530,000 Notes Payable 64,000 A Accum Depr - Build (205,000) 325,000 Common Stock 238,000 A Equipment $407,000 APIC 396,900 Accum Depr - Equip(119.000) 288.000 Retained Earnings 191400 $ 970,700 $ 970,700 The following economic events occurred during 2019 1. Performed services for $ 211,000, all on account. 2. Paid $ 169,000 for salaries that were due. (THINKI) 3. Collected $ 126,000 from customers on account. 4. Received $ 41,000 for services to be performed. 5. Paid $ 8,900 due for utilities. (THINKI) 6. Performed services totaling $ 236,000 of which $ 91,000 was received in cash. 7. Purchased $ 44,000 worth of supplies and paid cash. 8. Paid $ 7,300 for interest due on note. (THINK!) 9. Wrote off uncollectible bad debt of $ 11,600. (See 2030 text or page 351.) 10. Paid $ 167,000 for salaries. 11. Collected $ 234,000 on account. 12. Paid $ 22,000 on account 13. Issued 75,000 shares of $ 1 par value common stock and received $ 310,000. (See 2030 text or page 1059.) 14. Performed services totaling $ 284,200 of which $ 79,000 was received in cash. 15. Declared and paid a cash dividend of $ 85,000. (Use a dividend account.) (See notes.) 16. Collected $191,000 on account.

Answer 1

Prepare journal entries as follows:

Trn.	Account Titles	Debit	Credit
1	Accounts receivable	$211,000
	Service revenue		$211,000
2	Salaries payable	$19,300
	Cash		$19,300
3	Cash	$126,000
	Accounts receivable		$126,000
4	Cash	$41,000
	Unearned Service Revenue		$41,000
5	Utilities payable	$8,900
	Cash		$8,900
6	Cash	$91,000
	Accounts receivable	$145,000
	Service revenue		$236,000
7	Supplies	$44,000
	Cash		$44,000
8	Interest payable	$7,300
	Cash		$7,300
9	Bad debt	$5,300
	Allowance for doubtful	$6,300
	Accounts receivable		$11,600
10	Salaries expense	$167,000
	Cash		$167,000
11	Cash	$234,000
	Accounts receivable		$234,000
12	Accounts payable	$22,000
	Cash		$22,000
13	Cash	$310,000
	Common stock		$75,000
	APIC		$235,000
14	Cash	$79,000
	Accounts receivable	$205,200
	Service revenue		$284,200
15	Dividend	$85,000
	Cash		$85,000
16	Cash	$191,000
	Accounts receivable		$191,000
	Adjusting Entries as follows:
a	Bad debt	$12,100
	Allowance for doubtful		$12,100
b	Insurance expense ($27000-$9400)	$17,600
	Prepaid insurance		$17,600
c	Supplies expense ($31000+$44000-$38200)	$36,800
	Supplies		$36,800
d	Depreciation expense	$62,000
	Accumulated depreciation-Build.		$29,000
	Accumulated depreciation-Equip.		$33,000
e	Salaries expense	$10,700
	Utilities expense	$2,200
	Interest expense	$5,800
	Salaries payable		$10,700
	Utilities payable		$2,200
	Interest payable		$5,800
f	Unearned service revenue	$32,300
	Service revenue		$32,300