Chapter 2, Problem 3PB

D. Johnston, a physical therapist, opened Johnston’s Clinic. His accountant provided the following chart of accounts:

The following transactions occurred during July of this year:

1. a. Johnston deposited $35,000 in a bank account in the name of the business.
2. b. Bought filing cabinets on account from Muller Office Supply, $560.
3. c. Paid cash for chairs and carpeting for the waiting room, $835, Ck. No. 1000.
4. d. Bought a photocopier from Rob’s Office Equipment, $650, paying $250 in cash and placing the balance on account, Ck. No. 1001.
5. e. Received and paid the telephone bill, which included installation charges, $185, Ck. No. 1002.
6. f. Sold professional services on account, $2,255.
7. g. Received and paid the bill for the state physical therapy convention, $445, Ck. No. 1003.
8. h. Received and paid the electric bill, $335, Ck. No. 1004.
9. i. Received cash on account from credit customers, $1,940.
10. j. Paid on account to Muller Office Supply, $250, Ck. No. 1005.
11. k. Paid the office rent for the current month, $1,245, Ck. No. 1006.
12. l. Sold professional services for cash, $1,950.
13. m. Paid the salary of the receptionist, $960, Ck. No. 1007.
14. n. Johnston withdrew cash for personal use, $1,200, Ck. No. 1008.

Required

1. 1. Record the owner’s name in the Capital and Drawing T accounts.
2. 2. Correctly place the plus and minus signs for each T account and label the debit and credit sides of the accounts.
3. 3. Record the transactions in the T accounts. Write the letter of each entry to identify the transaction.
4. 4. Foot the T accounts and show the balances.
5. 5. Prepare a trial balance as of July 31, 20--.
6. 6. Prepare an income statement for July 31, 20--.
7. 7. Prepare a statement of owner’s equity for July 31, 20--.
8. 8. Prepare a balance sheet as of July 31, 20--.