# Question: Ted s Ambulette provides services to and from hospitals and nursing

Ted’s Ambulette provides services to and from hospitals and nursing homes. Ted, who went into business recently, keeps records on a work sheet similar to that illustrated in the text. At the start of the new year, his work sheet shows these balances: Cash—\$30,000; Accounts receivable—\$15,000; Fuel and parts inventory—\$8,000; Vehicles—\$192,000; Accounts payable—\$12,000; Loans payable—\$180,000; Ted Elias, Capital—\$53,000. (You will also need columns for Investments, Prepaid rent, Prepaid insurance, and Withholding tax payable.) These transactions occurred in the first month of the new year:
1. Ted leased a garage to store his vehicles and to make minor repairs. He paid \$6,000 for 2 months’ rent.
2. Ted bought accident insurance for a 2-year period, paying \$12,000.
3. He received \$13,000 from charge-account customers he had billed last year.
4. During the month he purchased \$10,000 of fuel and repair parts on credit.
5. He received \$50,000 during the month from customers who paid in cash.
6. At month-end, he sent out bills for \$14,000 to charge-account customers.
7. He paid \$12,000 to suppliers from whom he had purchased on account.
8. Ted’s drivers and other employees earned \$30,000. He paid them \$28,000 and withheld \$2,000 in taxes, which he will pay the government next month.
9. On the 15th of the month, Ted invested some of his cash in a 6-month \$20,000 Treasury note.
10. During the month, Ted used \$6,000 in fuel and repair parts from inventory.
11. Ted paid utility bills amounting to \$3,000. He also received a utility bill for \$1,000 that he had not paid at month-end. Record the opening balances on a work sheet similar to that illustrated in the text, and then analyze these transactions on the work sheet.

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