Question: Dr Harlan Elliott opened a magnetic resonance imaging MRI facility

Dr. Harlan Elliott opened a magnetic resonance imaging (MRI) facility, to be known as Harlan MRI. The following transactions took place during his first month of operation. Analyze these transactions on a work sheet similar to that illustrated in the text. You will need columns for Cash, Accounts receivable, Supplies inventory, Prepaid rent, Equipment, Notes payable, Accounts pay-able, Withholding taxes payable, and H. Elliott, Capital.
1. Dr. Elliott invested $ 80,000 in the business.
2. He purchased MRI equipment from the manufacturer for $ 1,800,000. To pay for the equip-ment, Harlan gave the manufacturer a note. He was required to repay the note in five annual payments of $ 360,000 each, together with interest of 6 percent a year on the unpaid balance.
3. He purchased supplies for $ 25,000 on credit. The supplies were received and put in inventory.
4. At the beginning of the month, he paid rent in the amount of $3,000.
5. He paid the bill for supplies in the amount of $25,000.
6. During the month, he incurred technician salaries of $12,000. Of this amount, he paid $11,000 in cash to employees. He withheld the other $1,000 from their salaries for taxes, which he will pay the government next month.
7. He billed his patients in the amount of $40,000 for MRI services.
8. On receiving the bills, the patients paid Dr. Elliott a total of $35,000.
9. During the month, he paid bills amounting to $4,000 for utility services.
10. He took inventory of the supplies and found that he had consumed $2,000 of those supplies in the course of the month’s activities.

  • CreatedDecember 30, 2014
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