Reference no: EM132748275
Problem - J. F. Outz, M.D., organized Hearts Inc. three years ago to practice cardiology. During April 20Y7, Hearts Inc. completed the following transactions:
Apr. 1. Paid office rent for April, $800.
Apr. 3. Purchased equipment on account, $2,100.
Apr. 5. Received cash on account from patients, $3,150.
Apr. 8. Purchased X-ray film and other supplies on account, $245.
Apr. 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.
Apr. 12. Paid cash to creditors on account, $1,250.
Apr. 17. Paid cash for renewal of a six-month property insurance policy, $370.
Apr. 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.
Apr. 24. Paid cash for laboratory analysis, $545.
Apr. 27. Paid dividends, $1,250.
Apr. 30. Recorded the cash received in payment of services (on a cash basis) to patients during April, $1,720.
Apr. 30. Paid salaries of receptionist and nurses, $1,725.
Apr. 30. Paid various utility expenses, $360.
Apr. 30. Recorded fees charged to patients on account for services performed in April, $5,145.
Apr. 30. Paid miscellaneous expenses, $132.
Hearts Inc.'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; Common Stock, 31, $10,000; Retained Earnings, 32, $20,583; Dividends, 33, $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 Hearts Inc. as of April 1.
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.