Listed below are the transactions of Rock Medical Company a

Listed below are the transactions of Rock Medical Company (a service company organized as a corporation), for the month of March. Record the following transactions for Rock Medical Company.

Mar    1       Jim Rock invests $50,000 cash in exchange for common stock in

                  Rock Medical Company.

         1       Takes out a $5,000, 30-day short term note payable with an annual

                  interest rate of 6%.

         1       Purchases medical equipment on account from JK Enterprises

                  for $22,800.

         3       Pays rent for office space, $1,500 for the month.

         3       Employs a receptionist, Michelle Kwin.

         4      Purchases medical supplies for cash, $1,165.

         10      Receives cash of $850 from patients for services performed.

         15      Bills patients $11,560 for services performed.

         21      Pays JK Enterprises on account, $7,600.

         26      Receives $2,600 from patients on account.

         30      Bills patients $6,890 for services performed.

         31      Pays the following expenses in cash: Salaries and

                  wages $2,500; miscellaneous office expenses $910.

         31      Pays principal and interest on the note payable.

         31      Medical supplies used during the month, $695.

         31     Record depreciation expense on the equipment using the straight line

                  method; the equipment has a 5-year life and no salvage value.

         31     Record utility expense of $200 incurred for the month; bill not

                  paid at month end

Chart of Accounts:

Cash

Accounts Receivable

Supplies

Equipment

Accumulated Depreciation—Equipment

Accounts Payable

Notes Payable (short term)

Common Stock

Note Payable

Service Revenue

Rent Expense

Office Expense

Salaries and Wages Expense

Supplies Expense

Depreciation Expense

Interest Expense

Utility Expense

Income Summary

Instructions

(a) Prepare journal entries to record the above transactions for Rock Medical Company; journal entries can be hand written or typed in Word/Excel; put on a separate page(s).

(b) Enter the transactions shown above in appropriate general ledger accounts (use T-accounts); t-accounts can be hand written; put on a separate page from journal entries prepared in (a).

(c) Prepare a trial balance in EXCEL; use formulas to total the debits and credits; PRINT on one page.

(d) Prepare an income statement, a statement of retained earnings, and an unclassified balance sheet in EXCEL; use formulas as appropriate; PRINT each on a SEPARATE page

(e) Prepare closing entries and enter the transactions in the T-accounts (from part (b); journal entries can be handwritten or typed in Word/Excel; put on a separate page(s).

(f) Prepare a post-closing trial balance in EXCEL; use formulas to total the debits and credit; PRINT on one page

Solution

(a)

(b)

(c)

(d)

(e)

(f)

Rock Medical Company
Journal entries for the month of March
Date	Account title	Debit	Credit
Mar.1	Cash	50000
	Common stock		50000
	(Cash invested )
Mar.1	Cash	5000
	Note payable (short term)		5000
	(6% short term note payble taken)
Mar.1	Equipment	22800
	Accounts payable		22800
	(Equipment purchased on account)
Mar.3	Rent expense	1500
	Cash		1500
	(Payment of rent for the month)
Mar.4	Supplies	1165
	Cash		1165
	(Purchase of supplies for cash)
Mar.10	Cash	850
	Service revenue		850
	(Cash received for service performed)
Mar.15	Accounts receivable	11560
	Service revenue		11560
	(Billing for service performed)
Mar.21	Accounts payable	7600
	Cash		7600
	(Payment made on account)
Mar.26	Cash	2600
	Accounts receivable		2600
	(Cash received from customers)
Mar.30	Accounts receivable	6890
	Service revenue		6890
	(Billing for service performed)
Mar.31	Salaries and wages expense	2500
	Office expenses	910
	Cash		3410
Mar.31	Note payable (short term)	5000
	Interest expense	25
	Cash		5025
	(Payment of principal and interest for note payable)
Mar.31	Supplies expense	695
	Supplies		695
	(Medical supplies used during the month)
Mar.31	Depreciation expense	380
	Accumulated depreciation - equipment		380
	(Depreciation on equipment - 5 year life no salvage)
Mar.31	Utilities expense	200
	Accounts payable		200
	(Utilities expense for the month)