Larry Sharp, M.D. - Part 1

The following information pertains to the medical practice of Larry Sharp, M.D., Inc. Using the information, analyze the transactions for Dr. Sharp. Record each transaction (1-7) in the appropriate columns of the Accounting Equation.

Assets = Liabilities + Owners' Equity + (Revenues - Expenses) - Dividends

1. Dr. Sharp invested (transferred into the corporation) the following assets: $15,000 in cash, $1,200 worth of supplies, and medical equipment that cost $8,900, receiving stock in the corporation.
2. Dr. Sharp buys $500 medical supplies on account. The practice will pay for them within 30 days of the purchase.
3. In payment for his services, Dr. Sharp accepts $600 cash and will bill his patients $250 on account.
4. At the beginning of the month, Dr. Sharp rents his office space for $1000.
5. His lease agreement requires him to pay his own utilities. They are estimated to be $90 this month.
6. Dr. Sharp is required to carry malpractice insurance, which is paid at the beginning of each year. The policy costs $3,600 and was paid in full.
7. To keep current on medical advances, Dr. Sharp frequently attends medical seminars. These seminars can cost as much as $10,000 each year.

1. What other types of transactions would you expect Dr. Sharp's practice to have?