PROBLEM 8

SECTION: PROFESSOR: Problem #8 Comprehensive Problem Oct. 1 1 Dr. Nick Marasigan, upon completing a residency program at Harvard Medical Center, established a medical practice in San Pablo, Laguna. During October 2020, the first month of operations, the following transactions occurred: Dr. Marasigan transferred P250,000 from his personal checking account to a bank account, Dr. Nick Marasigan, M.D. 1 A medical clinic, P1,000,000 and land, P250,000 were acquired by paying P50,000 in cash and issuing a 5-year, 20% note payable (interest is payable every 6 months) for the P1,200,000 balance. Acquired medical equipment costing P420,000 and medical supplies amounting to P39,000 by paying P59,000 cash and issuing a 24% note payable, maturing in 6 months, for the P400,000 balance. 2 Acquired "all-in-one" insurance for a year, P20,000. 4 Received cash from patients amounting to P117,000. 7 Bought medical supplies on account from San Pablo Supply, P17,000. 10 Paid salaries of nurses and office staff, P73,000. 12 Received P90,000 from the Laguna Experimental Drug Center for research to be conducted by Dr. Marasigan over the next 3 months. 18 Billed patients P317,000 for services rendered. 21 Paid P23,000 for repairs to the medical equipment. 23 Paid the telephone bill, P3,000. 24 Bought medical equipment on account from Dr. De Leon, P45,000 25 Collected P113,000 from patients billed on the 18th. 27 Paid P13,000 on account to San Pablo Supply. 30 Withdrew P200,000 in cash from the medical practice. 30 Paid P15,000 dues to the Laguna Medical Association. No. Required: 1. Establish the following accounts and account numbers in a ledger. Account No. Account Cash 110 Marasigan, Capital Accounts Receivable 120 Marasigan, Withdrawals 130 Income Summary Prepaid Insurance 140 Medical Revenues Land 150 Research Revenues 160 Salaries Expense Accumulated Depreciation- Insurance Expense 165 Repairs Expense 170 Supplies Expense Medical Supplies 310 320 330 410 420 510 520 530 540 Medical Building Medical Building Medical Equipment 282 35 Basic Financial Accounting and Reporting 2021 Edition by Prof. WIN Ballada Accumulated Depreciation Medical Equipment 24% Notes Payable 20% Notes Payable Accounts Payable Salaries Payable Interest Payable Unearned Research Revenues 175 210 220 230 240 250 260 Association Dues Expense Telephone Expense Depreciation Expense-Bldg. Depreciation Expense-Equipt. Interest Expense 550 560 570 580 590 2. Record the transactions for the month of October in a journal (page 1) and post the entries to the ledger. Use balance sheet accounts to record those transactions that will later require adjustments. 3. Prepare a trial balance on a worksheet and record the following adjustments on the worksheet. a. Insurance for one month has expired. b. Medical supplies on hand at month-end amounted to P21,000. c. Depreciation on the medical building and on the medical equipment is P5,000 and P9,000, respectively. d. Unearned research revenues in the amount of P30,000 have been earned. e. Salaries of P51,000 have accrued. f. Interest on the 20% and 24% notes are P20,000 and P8,000, respectively. 4. Complete the worksheet and prepare an income statement, a statement of changes in equity, and a balance sheet. 5. Record the adjusting and closing entries in the journal (page 2) and post the entries to the ledger 6. Prepare a post-closing trial balance. 7. Prepare the salaries and interest reversing entries in the journal (page 3) and post them to the ledger