C4–3 (continued)
Req. 2
1.
Cash (+A) ………………………………………………………
22
Note Payable (short–term) (+L) ………………..
22
Borrowed cash on note.
2.
Equipment (+A) ………………………………………………
25
Cash (−A) ……………………………………………..
25
Purchased equipment.
3.
Cash (+A) ………………………………………………………
5
Common Stock (+SE) …………………………..…
5
Issued common stock for cash.
4.
Software (+A) …………………………………………………
3
Cash (−A) ……………………………………………..
3
Purchased additional software.
5.
Supplies (+A) ………………………………………………….
7
Accounts Payable (+L) …………………………….
7
Purchased supplies for future use.
6.
Cash (+A) ………………………………………………………
47
Accounts Receivable (+A) ………………………………..
8
Service Revenue (+R, +SE) ……………………..
55
Service revenues earned.
7.
Salaries and Wages Expense (+E, −SE) ……………
30
Cash (−A) ……………………………………………..
30
Salaries and wages expenses incurred.
8.
Cash (+A) ………………………………………………………
9
Accounts Receivable (−A) ………………………..
9
Collected on customers’ accounts.
9.
Accounts Payable (−L)…………………………..…………
10
Cash (−A) …………………………………………….
10
Paid on accounts payable.
10.
Cash (+A) ………………………………………………………
3
Unearned Revenue (+L) …………………………
3
Deposit received for revenue not yet earned.
C4–3 (continued)
Req. 3 NORTHLAND PHYSICAL THERAPY
Unadjusted Trial Balance
At December 31, 2015
(in thousands)
Account Titles
Debit
Credit
Cash
$ 25
Accounts Receivable
2
Supplies
10
Equipment
33
Accumulated Depreciation–Equipment
$ 1
Software
8
Accumulated Amortization
1
Accounts Payable
2
Notes Payable (short–term)
22
Salaries and Wages Payable
Interest Payable
Income Taxes Payable
Unearned Revenue
3
Common Stock
20
Retained Earnings
4
Service Revenue
55
Salaries and Wages Expense
30
Supplies Expense
Depreciation Expense
Amortization Expense
Interest Expense
Income Tax Expense
Totals
$ 108
$ 108
Fundamentals of Financial Accounting, 5/e 4–73
© 2016 by McGraw–Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
C4–3 (continued)
Req. 4
11.
Amortization Expense (+E, –SE)…………………..
1
Accumulated Amortization (+xA, –A) …..
1
To record amortization for the year (amount is given).
12.
Supplies Expense (+E, –SE) ……………………….
7
Supplies (–A) ……………………………………
7
To record supplies used ($10 – 3).
13.
Depreciation Expense (+E, –SE) …………………
4
Accum. Depn–Equip. (+xA, –A) …………..
4
To record depreciation for the year (amount is given).
14.
Interest Expense (+E, −SE) ………………………..
1
Interest Payable (+L) ………………………….
1
To accrue interest for July – December, 2015.
15.
Salaries and Wages Expense (+E, −SE) ………
3
Salaries and Wages Payable (+L) ………..
3
To accrue wages incurred but not paid.
16.
Income Tax Expense (+E, −SE) …………………..
4
Income Taxes Payable (+L) ………………..
4
To accrue income tax.
C4–3 (continued)
Req. 5 NORTHLAND PHYSICAL THERAPY
Adjusted Trial Balance
At December 31, 2015
(in thousands)
Account Titles
Debit
Credit
Cash
$ 25
Accounts Receivable
2
Supplies
3
Equipment
33
Accumulated Depreciation–Equipment
$ 5
Software
8
Accumulated Amortization
2
Accounts Payable
2
Notes Payable (short–term)
22
Salaries and Wages Payable
3
Interest Payable
1
Income Taxes Payable
4
Unearned Revenue
3
Common Stock
20
Retained Earnings
4
Service Revenue
55
Salaries and Wages Expense
33
Supplies Expense
7
Depreciation Expense
4
Amortization Expense
1
Interest Expense
1
Income Tax Expense
4
Totals
$ 121
$ 121
C4–3 (continued)
Req. 6 NORTHLAND PHYSICAL THERAPY
Income Statement
For the Year Ended December 31, 2015
(in thousands)
Revenues:
Service Revenue
$ 55
Expenses:
Salaries and Wages Expense
33
Supplies Expense
7
Depreciation Expense
4
Amortization Expense
1
Interest Expense
1
Income Tax Expense
4
Total Expenses
50
Net Income
$ 5
NORTHLAND PHYSICAL THERAPY
Statement of Retained Earnings
For the Year Ended December 31, 2015
(in thousands)
Balance, January 1, 2015
$ 4
Add: Net Income
5
Subtract: Dividends
0
Balance, December 31, 2015
$ 9
C4–3 (continued)
Req. 6 (continued)
NORTHLAND PHYSICAL THERAPY
Balance Sheet
At December 31, 2015
C4–3 (continued)
Req. 8
NORTHLAND PHYSICAL THERAPY
Post–Closing Trial Balance
At December 31, 2015
(in thousands)
Account Titles
Debit
Credit
Cash
$ 25
Accounts Receivable
2
Supplies
3
Equipment
33
Accumulated Depreciation–Equipment
$ 5
Software
8
Accumulated Amortization
2
Accounts Payable
2
Notes Payable (short–term)
22
Salaries and Wages Payable
3
Interest Payable
1
Income Taxes Payable
4
Unearned Revenue
3
Common Stock
20
Retained Earnings
9
Service Revenue
0
Salaries and Wages Expense
0
Supplies Expense
0
Depreciation Expense
0
Amortization Expense
0
Interest Expense
0
Income Tax Expense
0
Totals
$ 71
$ 71
Req. 9
The business generated $5 (thousand) in net income during 2015. Its net profit margin
was 9.1% ($5 ÷ 55 = 0.091). The company is financed primarily by liabilities, with
C4–4
Req. 1, 3, 5, and 8 (T–accounts)
Cash (A)
Accounts
Receivable (A)
Supplies (A)
Beg. 5
7/2 18
Beg. 4
Beg. 2
7/1 21
8/4 3
12/6 9
12/8 8
9/5 10
7/3 5
12/7 35
12
12/6 56
12/9 11
12/31(12) 8
12/8 8
12/10 3
Bal. 31
Bal. 5
Bal. 4
Equipment (A)
Accumulated
Depreciation–
Equipment (xA)
Beg. 6
Beg. 0
7/2 18
12/31(13) 2
8/4 3
Bal. 27
Bal. 2
Software (A)
Accumulated
Amortization (xA)
Beg. 12
Beg. 3
12/31(11) 3
Bal. 12
Bal. 6
Accounts
Beg. 7
Beg. 0
7/1 21
Bal. 21
Bal. 3
Bal. 1
Bal. 4
Beg. 0
Bal. 15
12/10 3
7/3 5
Bal. 3
Bal. 20
C4–4 (continued)
Req. 1, 3, 5, and 8 (T–accounts)
Retained
Earnings (SE)
Service
Revenue (R)
Beg. 4
Beg. 0
CE1 9
CE1 65
12/6 65
Bal. 13
Bal. 0
Bal. 0
Bal. 0
Bal. 0
Bal. 0
Bal. 0
Bal. 0
C4–4 (continued)
Req. 2
1.
Cash (+A) …………………………………………………
21
Notes Payable (short–term) (+L) …………
21
Borrowed cash on note.
2.
Equipment (+A) …………………………………………
18
Cash (−A) ………………………………………..
18
Purchased equipment.
3.
Cash (+A) …………………………………………………
5
Common Stock (+SE) ………………………..
5
Issued common stock for cash.
4.
Equipment (+A) …………………………………………
3
Cash (−A) ………………………………………..
3
Purchased additional equipment.
5.
Supplies (+A) …………………………………………….
10
Accounts Payable (+L) ……………………..
10
Purchased supplies on account.
6.
Cash (+A) …………………………………………………
56
Accounts Receivable (+A) …………………………..
9
Service Revenue (+R, +SE) ……………….
65
Service revenues earned.
7.
Salaries and Wages Expense (+E, −SE) ……….
35
Cash (−A) ………………………………………..
35
Salaries and wages expense incurred.
8.
Cash (+A) …………………………………………………
8
Accounts Receivable (−A) ………………….
8
Collected on customers’ accounts.
9.
Accounts Payable (−L) ……………………………….
11
Cash (−A) ……………………………………….
11
Paid on accounts payable.
10.
Cash (+A) …………………………..…………………….
3
Unearned Revenue (+L) …………………..
3
Received customer deposit before doing work.