On January 1 2009 Dr Beth Hill started a new professional co

On January 1, 2009, Dr. Beth Hill started a new professional corporation ill started a new professional corporation, Beth Hill, P.C., to practice medicine. On January 1, 2009 the accounts showed the following amounts: Accounts Payable Accounts Receivable Cash Contributed Capital Office Equipment Office Supplies Retained Earnings Notes Payable $2,000 6,200 48,100 100,000 60,000 3,500 5,800 10.000 Between January and June 30, 2009 the following occurred: a. Purchased $1,000 of office equipment for cash. b. Borrowed $3,000 of cash from a Note Payable with the Bank (ignore interest). c. Purchased office supplies of $400 on account. d. Dr. Hill thought about purchasing a building but decided not to. Record each transaction to the appropriate T account. Remember to first post beginning balances for each T account. Prepare a balance sheet at June 30, 2009. Show Taccounts for the transactions above to support your answer.

Solution

Journal entries: Transaction. Account Titles and Explanation Debit Credit a. Office equipment 1000 cash 1000 (Purchased office equipment) b. cash 3000 Notes payable 3000 (Borrowed cash for note payable) c. Office supplies 400 Accounts payable 400 (Purchased office supplies on account) d. No entry Posting of journal entries: Cash Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 48100 Office equipment a. 1000 47100 Service revenue b. 3000 50100 Accounts receivable Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 6200 Office supplies Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 3500 Accounts payable 400 3900 Office Equipment Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 60000 cash 1000 61000 Accounts payable Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 2000 Office supplies 400 2400 Notes payable Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 10000 Cash 3000 13000 Contributed capital Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 100000 Retained earnings Date Explanation Ref Debit Credit Balance 2009 Jan 1. Bal 5800 Balance sheet Assets $ $ Current assets: Cash 50100 Accounts receivable 6200 Office supplies 3900 Total current assets 60200 Property.Plant and Equipment: Office equipment 61000 Total assets 121200 Liabilities and stockholder\'s equity Current liabilities: Accounts payable 2400 Long-term liabilities: Notes payable (Note) 13000 Stockholder\'s equity: Contributed capital 100000 Retained earnings 5800 Total stockholder\'s equity 105800 Total liabilities and stockholder\'s equity 121200 Note:It is assumed that notes are payable after 1 year and hence classified as long-term liability.