College of St. Scholastica Department of Health Informatics and Information Management TRANSACTION ACCOUNTING ASSIGNMENT INSTRUCTIONS: Working independently and using the data and basic templates...

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College of St. Scholastica

Department of Health Informatics and Information Management

TRANSACTION ACCOUNTING ASSIGNMENT

INSTRUCTIONS: Working independently and using the data and basic templates provided:


a. Prepare journal entries for above transactions. Note:the first two have been done for you.
b. Post journal entries to general ledger accounts (T-accounts)
c. Prepare a trial balance

The following transactions occurred in March, 20xx when Doctors Smith and Jones opened the Lake Superior Ambulatory Care Facility.

1. Each physician contributed $25,000 to the facility; thus beginning balance (BB) in Cash T-Account is $50,000 and in OE T-Account is 50,000

2. The first 2 months rent of $2000 was prepaid for their space (note: prepaid rent is an asset)

3. Inventory of supplies was purchased for $2500 on account with a local office supply vendor

4. They purchased equipment worth $5000, borrowing money from the bank via a short-term note

5. They collected $3,000 in cash payments from patients at the time of the visit

6. Patients were billed for $4,000 for services rendered. (note: revenue is earned when services are rendered)

7. While treating patients, $400 of supplies from inventory were used up. (note: when supplies are used they become expenses)

8. $2,500 was received in payment from patient who had been billed

9. The physicians paid $2500 plus $30 interest to the vendor from whom they had previously purchased inventory supplies

10. They paid other expenses of: utilities - $50 and Salaries/wages - $1600

11. The physicians recognized that one month’s prepaid rent had now been used up. (note: 1 month's prepaid rent now becomes an expense)

GENERAL JOURNAL
March 20xx

Debit

Credit

1. Cash

$25,000

Cash

$25,000

Owner’s Equity

$50,000

Physician investment in clinic

2. Prepaid Rent

$2,000

Cash

$2,000

$2,000

Prepaid 2 months rent

3. Inventory

$2,500

Accounts Payable

$2,500

Purchase of inventory items

4.Cash

$5,000

Bank Loan Payable

$5,000

Short term

5. Accounts Payable

$3,000

Cash

$5,000

Cash payments on AP

6.Accounts Receivable

$4,000

$2,500

Patient Services Revenue

$4,000

$2,500

Patients billed for services rendered

7.Operating Expenses

Salaries and wages

$1600

Utilities

Employee Insurance

Repairs

Other

$50

$400

$2530

8.

9.

10.

11. Rent Expense

$1000

Prepaid Rent

$1000

One month rent expensed

GENERAL LEDGER

March 20xx

Asset T-Accounts

+ Cash -

+ Prepaid Rent -

+ Supply Inventory -

1. 50,000

2. 2,000

2. 2,000

XXXXXXXXXX

EB:

EB:

EB:


+ Equipment -

+ Accounts Receivable -

EB:

EB:


Expense T-Accounts

+ Supply -

+ Interest -

+ Utilities -

EB:

EB:

EB:

+ Salary & Wages -

+ Rent -

XXXXXXXXXX

EB:

EB:


Equity T-Accounts Liability and Owner’s Equity Accounts

Liability Accounts

- Accounts Payable +

- Bank Note Payable +

EB:

EB:

Owner's Equity Account



- Owner’s Equity +

1. 50,000

EB:


Revenue Accounts

- Patient Services Revenue +

EB:


TRIAL BALANCE
Lake Superior Ambulatory Care Facility
March 31, 20xx

Note: Use Ending Balances of each type of account to create the trial balance

Debit

Credit

Cash

Prepaid Rent

1000

Inventory

Equipment

Accounts Receivable

Supply Expense

Interest Expense

Utilities Expense

Salary & Wage Expense

Rent Expense

1000

Accounts Payable

Bank Note Payable

Owner’s Equity

50,000

Patient Services Revenue

TOTAL

__________________

A + E

_________________

L + OE + R

Assets +Expenses=Liabilities + Owner's Equity + Revenues

Answered 1 days AfterMay 16, 2021

Solution

Khushboo Murarka answered on May 17 2021
17 Votes

College of St. Scholastica
Department of Health Informatics and Information Management
TRANSACTION ACCOUNTING ASSIGNMENT
INSTRUCTIONS:   Working independently and using the data and basic...

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