Paul Morris is a doctor of veterinary medicine specializing in horses. At the beginning of March, he incorporated his practice, and has completed his first month in business. He has come to you seeking help setting us his “books.’The following is a transcript of your conversation with Dr. Morris.

(a) Prepare summary journal entries that reflect the first month of business.

(b) Use T-accounts to capture the impact of the transactions on the accounts.

(c) Prepare a trial balance as of the end of March.

(d) Prepare an income statement and statement of retained earnings for the month of March. Prepare the resulting balance sheet as of the end of the month.

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Dr. Morris "I specialize in embryo transplants for horses that will be used in cutting horse competitions. I started the month by investing $30,000 of my own money in the stock of the business." You "By stock, do you mean livestock animals or capital stock?" Dr. Morris "I mean the capital stock of the business -- I don't actually own any animals. I work with clients' animals only." You "Ok, is that all the money you had to start out the business? Were there any other investors?" Dr. Morris "I am the only owner, but the business did borrow $50,000 to buy some land on which I plan to build a barn next year. Is that what you mean by other investors?" You Dr. Morris "Not exactly. The loan will need to be listed as a liability of the business. Have you paid off any of the loan yet?" "Not yet. The loan is not due for several years. But, I did pay $400 interest on the loan for the month."