ACC 205 E1-21 - Caren Smith, M.D.

ACC 205 Week 1 E1-21 - Caren Smith, M.D.

E1-21 - Caren Smith, M.D

E1-21 Using the accounting equation to analyze transactions [1020 min]

Caren Smith opened a medical practice. During July, the first month of operation, the business, titled Caren Smith, M.D., experienced the following events:

Jul 6 Smith invested $55,000 in the business by opening a bank account in the name of C. Smith, M.D. The business gave capital to Smith.

9 Paid $46,000 cash for land.

12 Purchased medical supplies for $1,800 on account.

15 Officially opened for business.

1531 During the rest of the month, Smith treated patients and earned service revenue of $8,000, receiving cash.

29 Paid cash expenses: employees salaries, $1,600; office rent, $900; utilities, $100.

30 Returned supplies purchased on the 12th for the cost of those supplies, $700.

31 Paid $1,100 on account.

Requirement

1. Analyze the effects of these events on the accounting equation of the medical practice of Caren Smith, M.D. Use a format similar to that of Exhibit 1-6, with headings for Cash; Medical supplies; Land; Accounts payable; and Smith, capital.