Question

Please help resolve this problem

Show journal entries using debits and credits. See Appendix 9-A.) 9-29. HELP started the year with the following account balances (shown in alphabetical order): Accounts Receivable $300,000 Cash 135,000 Accounts Payable Equipment 70,000 100,000 9-28. The Hospital for Ending Long-term Problems (HELP) had the following financial events during the year: 1. HELP collected $250,000 in cash that it had billed to the federal government under Medicare. The money had been earned in the prior fiscal year and was recorded as revenue then. 2. HELP paid back $100,000 it borrowed at the end of last year on a line of credit. The bank did not charge interest 3. HELP bought $25,000 in supplies to treat patients. HELP paid the supplier for all the supplies with cash. 4. HELP belongs to the state hospital association, and its membership is current (meaning it is paid up through the end of the year). HELP receives an invoice for $75,000 for next year's fees but has not paid it yet. 5. HELP replaced many of the patient examination tables. They cost $50,000 and HELP put $10,000 down in cash. The rest is still owed. 6. HELP paid $65,000 it owed employees from last year. Employees had earned this last fiscal year, and it was recorded as an expense then. 7. Show the impact of these transactions on the fundamental equation of accounting. (Optional: Line of Credit Net Assets with donor restrictions 217,000 125,000 Net Assets without donor restrictions Supplies 7,000 70,000 Wages Payable Record these opening balances and the transactions from Problem 9-28 in a worksheet similar to Exhibit 9-4. 9-30. Use the ending balances from Problem 9-29 to prepare a balance sheet.

Answer 1

JOURNAL ENTRIES Credit Debit Particulars 1 Cash 2,50,000 Accounts receivable 2,50,000 (Collection from federal government towards its billing) 2 Line of credit payable account 1,00,000 Cash 1,00,000 (Pay,ment of amount borrowed on a line of credit) 3 Supplies 25,000 Cash 25,000 (Payment to suppliers for purchase of supplies) 4 No entry required on receipt of invoice for next year's fees 5 Furnitures and fixtures 50,000 Cash 10,000 Accounts payable 40,000 (Replacement of patient examination tables)

6 Outstanding employee expenses 65,000 65,000 Cash (Payment made to employees) Fundamental accounting equation is Assets=Liabilities+ Owner's equity 1 Cash will be increased by $250,000 and accounts receivable will be decreased by $250,000, resulting in no change in the total value of assets 2 Liabilities like line of credit payable and assets i.e. cash will be decreased by $100,000 3 Assets wilcrease by $25,000 due to purchase of supplies and simultaneously decrease by same amount due to outflow of cash. 4 No impact on the fundamental accounting equation 5 Assets will increase by S40,000 net (50000-10000) due to replacement of patient examination tables and liabilities will increase by $40,000 on account of accounts payable 6 Assets and liabilities will decrease by $65,000 due to payment of outstanding employee expenses