Question

Problem 3-01 (Part Level Submission)

Listed below are the transactions of David Davis, D.D.S., for the month of September.

Sept.   1		Davis begins practice as a dentist, invests $21,900 cash and issues 2,190 shares of $10 par stock.
2		Purchases dental equipment on account from Green Jacket Co. for $17,640.
4		Pays rent for office space, $670 for the month.
4		Employs a receptionist, Michael Bradley.
5		Purchases dental supplies for cash, $910.
8		Receives cash of $1,570 from patients for services performed.
10		Pays miscellaneous office expenses, $460.
14		Bills patients $6,330 for services performed.
18		Pays Green Jacket Co. on account, $3,930.
19		Pays a dividend of $3,250 cash.
20		Receives $1,030 from patients on account.
25		Bills patients $1,980 for services performed.
30		Pays the following expenses in cash: Salaries and wages $1,730; miscellaneous office expenses $84.
30		Dental supplies used during September, $300.

Record depreciation using a 5-year life on the equipment, the straight-line method, and no salvage value.

Prepare t-accounts, trial balance, multiple-step income statement for the year, retained earnings statement for the year, balance sheet, Journalize the closing entries, and post-closing trial balance.

Answer 1

Working as follows:

Date	Account Titles	Debit	Credit
Sept.
1	Cash	$21,900
	Common stock		$21,900
2	Dental Equipment	$17,640
	Accounts payable		$17,640
4	Rent expense	$670
	Cash		$670
4	No entry
5	Supplies	$910
	Cash		$910
8	Cash	$1,570
	Fees revenue		$1,570
10	Misc office expense	$460
	Cash		$460
14	Accounts receivable	$6,330
	Fees revenue		$6,330
18	Accounts payable	$3,930
	Cash		$3,930
19	Dividends	$3,250
	Cash		$3,250
20	Cash	$1,030
	Accounts receivable		$1,030
25	Accounts receivable	$1,980
	Fees revenue		$1,980
30	Salaries and wages expense	$1,730
	Misc office expense	$84
	Cash		$1,814
30	supplies expense	$300
	supplies		$300
30	Depreciation expense	$3,528
	Accumulated depreciation ($17640/5years)		$3,528

__________________________________________________________________

Prepare T-accounts as follows:

Cash
1	$21,900	2	$670
8	$1,570	5	$910
20	$1,030	10	$460
		18	$3,930
		19	$3,250
		30	$1,814
End. Bal.	$13,466
Common Stock
		1	$21,900
		End. Bal.	$21,900
Dental Equipment
2	$17,640
End. Bal.	$17,640
Accounts payable
18	$3,930	2	$17,640
		End. Bal.	$13,710
Rent expense
4	$670
End. Bal.	$670
Supplies
5	$910	30	$300
End. Bal.	$610
Supplies expense
30	$300
End. Bal.	$300
Fees revenue
		8	$1,570
		14	$6,330
		25	$1,980
		End. Bal.	$9,880
Accounts receivable
14	$6,330	20	$1,030
25	$1,980
End. Bal.	$7,280
Misc. Office expense
10	$460
30	$84
End. Bal.	$544
Salaries and wage expense
30	$1,730
End. Bal.	$1,730
Dividends
30	$3,250
End. Bal.	$3,250
Depreciation expense
30	$3,528
End. Bal.	$3,528
Accumulated Depreciation
		30	$3,528
		End. Bal.

___________________________________________________________________

Prepare Income statement as follows:

Income statement
Revenue:
Fees revenue		$9,880
Less: operating expenses:
Salaries and wages expense	$1,730
Rent expense	$670
Misc. office expense	$544
Supplies expense	$300
Depreciation expense	$3,528	$6,772
Net Income		$3,108

_____________________________________________________

Prepare Statement of retained earnings as follows:

Statement of retained earnings
Beg. Bal.	-
Add: Net Income	$3,108
Less: Dividends	($3,250)
End. Bal.	($142)

_________________________________________________________

Prepare Balance sheet as follows:

Balance Sheet
Cash	$13,466
Accounts recivable	$7,280
Supplies	$610
Dental Equipment ($17640-$3528)	$14,112
Total Assets	$35,468
Liabilities
Accounts payable	$13,710
Stockholders' equity
Common stock	$21,900
retained earnings	($142)
Total Liabilities & SE	$35,468