Question

January 1: A dentist opens a dental practice by depositing $10,000 into a bank account in the business name

January 2: The dental business borrows $100,000 from the bank

January 3: The dentist pays for malpractice insurance for the month, $2,000

January 4: Purchases for cash dental equipment, including X-ray machine, chair, etc. $60,000

January 20: The dentist pays for a billboard to advertise his services for one month, $500

January 21: The dentist performs dental services for the first half of the month and receives $8,000 for services rendered

January 29: Pays the dental hygienist $2500

January 31: Bills patients for services rendered that have not been paid $5,000

Date	Account	Debit	Credit
1/1/16	Cash	10000
	Capital		10000		Chart of Accounts:
1/2/16					Cash
					Accounts Receivable
1/3/16					Equipment
					Notes Payable
1/4/06					Capital
					Fees Earned
1/20/16					Insurance Expense
					Advertising Expense
1/21/16					Salaries Expense
1/29/16
1/31/16

1. What is the net income for January?

2. How much do patients owe the dentist as of January 31?

Answer 1

Date	account				Debit	Credit
1-Jan	Cash				10,000
	Capital					10,000
2-Jan	Cash				100,000
	Notes payable					100,000
3-Jan	Insurance expense				2,000
	cash					2,000
4-Jan	Equipment				60,000
	cash					60,000
20-Jan	Advertising expense				500
	Cash					500
21-Jan	Cash				8,000
	Fees earned					8,000
29-Jan	Salaries expense				2,500
	cash					2,500
31-Jan	Accounts receivable				5,000
	Fees earned					5,000
b)	net income		8,000
	(8000+5000-2000-500-2500)
c)	patients owe		5,000