1. Analyze the effects of these events on the accounting equation of the sports clinic. For example, the transaction increased asset and increased capital; the transaction increased expenses and decreased cash; the transaction increased asset and decreased asset; etc. 2. Prepare the journal entries to record the above transactions. 3. Post the transaction to the “T” accounts of the company and balance off each account.
During February 2015, Claude Sample who operates a sports clinic
presented the following for the first month of his company’s
operation:
Feb 1. Sample invested $55,000 in the business by depositing
it into the company’s bank account.
Feb 2. Paid $46,000 cash for land.
Feb 3. Purchased medical supplies for $1,800 on account.
Feb 4. Officially opened for business.
Feb 5. During the month, Sample treated patients and earned service revenue of
$8,000, receiving cash.
Feb 6. Paid cash expenses: employees’ salaries, $1,600; office rent, $900;
utilities, $100.
Feb 7. Returned supplies purchased on the 3rd for the cost of those supplies,
$700.
Feb 8. Paid $1,100 on account for purchases made on Feb 3.
1. Analyze the effects of these events on the
For example, the transaction increased asset and increased capital; the transaction
increased expenses and decreased cash; the transaction increased asset and
decreased asset; etc.
2. Prepare the
3.
account.
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