Question 2.IP: J. F. Outz, M.D., has been practicing as a cardiologist for ......

Financial Accounting [EXP-43430]

J. F. Outz, M.D., has been practicing as a cardiologist for three years. During April 2011, Outz completed the following transactions in her practice of cardiology:

Apr. 1. Paid office rent for April, $800.

3. Purchased equipment on account, $2,100.

5. Received cash on account from patients, $3,150.

8. Purchased X-ray film and other supplies on account, $245.

9. One of the items of equipment purchased on April 3 was defective. It was returned with the permission of the supplier, who agreed to reduce the account for the amount charged for the item, $325.

12. Paid cash to creditors on account, $1,250.

Apr. 17. Paid cash for renewal of a six-month property insurance policy, $370.

20. Discovered that the balances of the cash account and the accounts payable account
as of April 1 were overstated by $200. A payment of that amount to a creditor
in March had not been recorded. Journalize the $200 payment as of April 20.

24. Paid cash for laboratory analysis, $545.

27. Paid cash from business bank account for personal and family expenses, $1,250.

30. Recorded the cash received in payment of services (on a cash basis) to patients
during April, $1,720.

30. Paid salaries of receptionist and nurses, $1,725.

30. Paid various utility expenses, $360.

30. Recorded fees charged to patients on account for services performed in April, $5,145.

30. Paid miscellaneous expenses, $132.

Outz’s account titles, numbers, and balances as of April 1 (all normal balances) are listed as follows: Cash, 11, $4,123; Accounts Receivable, 12, $6,725; Supplies, 13, $290; Prepaid Insurance, 14, $465; Equipment, 18, $19,745; Accounts Payable, 22, $765; J. F. Outz, Capital, 31, $30,583; J. F. Outz, Drawing, 32, $0; Professional Fees, 41, $0; Salary Expense, 51, $0; Rent Expense, 53, $0; Laboratory Expense, 55, $0; Utilities Expense, 56, $0;
Miscellaneous Expense, 59, $0.

Instructions
1. Open a ledger of standard four-column accounts for Dr. Outz as of April 1. Enter the balances in the appropriate balance columns and place a check mark (9) in the Posting Reference column. (Hint: Verify the equality of the debit and credit balances in the ledger before proceeding with the next instruction.)
2. Journalize each transaction in a two-column journal.
3. Post the journal to the ledger, extending the month-end balances to the appropriate balance columns after each posting.
4. Prepare an unadjusted trial balance as of April 30.

Step-by-Step

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1., 2., and 3.

Journal Page 27
Date	Description	Post. Ref.	Debit	Credit
2011 Apr. 1	Rent Expense	53	800
	Cash	11		800
	Paid offi ce rent for April.

3		18	2,100
	Accounts Payable	22		2,100
	Purchased equipment on account.
	Purchased equipment on account.
5	Cash	11	3,150
	Accounts Receivable	12		3,150
	Received cash on account.
	Received cash on account.
8	Supplies	13	245
	Accounts Payable	22		245
	Purchased supplies.
9	Accounts Payable	22	325
	Equipment	18		325
	Returned defective equipment.
	Returned defective equipment.
12	Accounts Payable	22	1,250
	Cash	11		1,250
	Paid creditors on account.
	Paid creditors on account.
17	Prepaid Insurance	14	370
	Cash	11		370
	Renewed six-month property policy.
	Renewed six-month property policy.
20	Accounts Payable	22	200
	Cash	11		200
	Recorded March payment to creditor.
	Recorded March payment to creditor.

Journal Page 28
Date	Description	Post. Ref.	Debit	Credit
2011 Apr.24	Laboratory Expense	55	545
	Cash	11		545
	Paid for laboratory analysis.
	Paid for laboratory analysis.
27	J. F. Outz, Drawing	32	1,250
	Cash	11		1,250
	J. F. Outz withdrew cash for personal use.
	J. F. Outz withdrew cash for personal use.
30	Cash	11	1,720
	Professional Fees	41		1,720
	Received fees from patients.
30	Salary Expense	51	1,725
	Cash	11		1,725
	Paid salaries.
30	Utilities Expense	56	360
	Cash	11		360
	Paid utilities.
30	Accounts Receivable	12	5,145
	Professional Fees	41		5,145
	Recorded fees earned on account.
	Recorded fees earned on account.
30	Miscellaneous Expense	59	132
	Cash	11		132
	Paid expenses.

Account Cash Account No. 11
Date	Item	Post. Ref.	Debit	Credit	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2011 Apr.1	Balance				4,123
1		27		800	3,323
5		27	3,150		6,473
12		27		1,250	5,223
17		27		370	4,853
20		27		200	4,653
24		28		545	4,108
27		28		1,250	2,858
30		28	1,720		4,578
30		28		1,725	2,853
30		28		360	2,493
30		28		132	2,361

Account Accounts Receivable Account No. 12
Date	Item	Post. Ref.	Debit	Credit	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2011 Apr.1	Balance				6,725
5		27		3,150	3,575
30		28	5,145		8,720

Account Supplies Account No. 13
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.1	Balance				290
8		27	245		535

Account Prepaid Insurance Account No. 14
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.1	Balance				465
17		27	370		835

Account Equipment Account No. 18
Date	Item	Post. Ref.	Debit	Credit	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2011 Apr.1	Balance				19,745
3		27	2,100		21,845
9		27		325	21,520

Account Accounts Payable Account No. 22
Date	Item	Post. Ref.	Debit	Credit	Balance
Date	Item	Post. Ref.	Debit	Credit	Debit	Credit
2011 Apr.1	Balance					765
3		27		2,100		2,865
8		27		245		3,110
9		27	325			2,785
12		27	1,250			1,535
20		27	200			1,335

Account J. F. Outz, Capital Account No. 31
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.1	Balance					30,583

Account J. F. Qutz, Drawing Account No. 32
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.27		28	1,250		1,250

Account Professional Fees Account No. 41
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.30		28		1,720		1,720
30		28		5,145		6,865

Account Salary Expense Account No. 51
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.30		28	1,725		1,725

Account Rent Expense Account No. 53
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.1		27	800		800

Account Laboratory Expense Account No. 55
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.24		28	545		545

Account Utilities Expanse Account No. 56
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.30		28	360		360

Account Miscellaneous Expense Account No. 59
Date	Item	Post. Ref.	Debit	Credit	Balance
					Debit	Credit
2011 Apr.30		28	132		132

J. F. Outz, M.D. Unadjusted Trial Balance April 30, 2011
	Debit Balances	Credit Balances
Cash	2,361
Accounts Receivable	8,720
Supplies	535
Prepaid Insurance	835
Equipment	21,520
Accounts Payable		1,335
J. F. Outz, Capital		30,583
J. F. Outz, Drawing	1,250
Professional Fees		6,865
Salary Expense	1,725
Rent Expense	800
Laboratory Expense	545
Utilities Expense	360
Miscellaneous Expense	$\underline{132}$	$\underline{ }$
	$\underline{38,783}$	$\underline{38,783}$