Question

D. Johnston, a physical therapist, opened Johnston’s Clinic. His accountant provided the following chart of accounts:
Assets
Cash
Accounts Receivable
Office Equipment
Office Furniture
Liabilities
Accounts Payable
Owner’s Equity
D. Johnston, Capital
D. Johnston, Drawing
Revenue
Professional Fees
Expenses
Salary Expense
Rent Expense
Utilities Expense
Miscellaneous Expense

The following transactions occurred during July of this year:
a. Johnston deposited $ 35,000 in a bank account in the name of the business.
b. Bought filing cabinets (Office Equipment) on account from Muller Office Supply, $ 560.
c. Paid cash for chairs and carpeting (Office Furniture) for the waiting room, $ 835, Ck. No. 1000.
d. Bought a photocopier from Rob’s Office Equipment, $ 650, paying $ 250 in cash and placing the balance on account, Ck. No. 1001.
e. Received and paid the telephone bill, which included installation charges, $ 185, Ck. No. 1002.
f. Sold professional services on account, $ 2,255.
g. Received and paid the bill for the state physical therapy convention, $ 445, Ck. No. 1003 ( Miscellaneous Expense).
h. Received and paid the electric bill, $ 335, Ck. No. 1004.
i. Received cash on account from credit customers, $ 1,940.
j. Paid on account to Muller Office Supply, $ 250, Ck. No. 1005.
k. Paid the office rent for the current month, $ 1,245, Ck. No. 1006.
l. Sold professional services for cash, $ 1,950. m. Paid the salary of the receptionist, $ 960, Ck. No. 1007.
n. Johnston withdrew cash for personal use, $ 1,200, Ck. No. 1008.

Required
1. Record the owner’s name in the Capital and Drawing T accounts.
2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts.
3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction.
4. Foot the T accounts and show the balances.
5. Prepare a trial balance as of July 31, 20—.
6. Prepare an income statement for July 31, 20—.
7. Prepare a statement of owner’s equity for July 31, 20—.
8. Prepare a balance sheet as of July 31, 20—.



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  • CreatedOctober 21, 2014
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