ACCT 5301
Cederville Clinic Basic Accounting Cycle
Part 1. General Journal Entries and Adjusting Journal Entries.
The following transactions are for the Cederville Clinic, which began on June 1, 2014. Prepare the Journal
Entries for Cederville Clinic in the space provided. Refer to the T-accounts in Part 2 for suggested account
titles.
6/1: Each of the 3 owners contributed $250,000 cash into the company for Class A Common Stock, which is
limited to licensed professionals.
__________________________________
____________
___________________________________
____________
6/1: Prepaid the rent on a clinic building for three months at a rate of $10,000 per month.
__________________________________
____________
___________________________________
____________
6/2: Cederville Clinic purchased and installed furnishings costing $50,000 and equipment costing $900,000
by paying cash of $130,000 and issuing a note payable for the balance.
__________________________________
____________
__________________________________
____________
___________________________________
____________
___________________________________
____________
6/10: Cederville purchased medical supplies for the clinic costing $50,000 with cash. Use the asset account
(Medical Supplies) to record the purchase at this time.
__________________________________
____________
___________________________________
____________
6/16-30: Cederville opened for operations and provided $12,000 in cash services and billed insurance
providers for $54,000 in services.
__________________________________
____________
__________________________________
____________
___________________________________
____________
6/22: Cederville received $20,000 cash in advance for corporate services to be rendered in July and August.
__________________________________
____________
Unearned Revenue
____________
6/30: Cederville received utility bills of $3,000 for the month which will be paid in July (use Accounts
Payable).
__________________________________
____________
___________________________________
____________
6/30: Cederville paid total salaries expenses of $16,800 for the month.
__________________________________
____________
___________________________________
6/30: Paid $3,000 in cash dividends to the owners.
__________________________________
____________
____________
___________________________________
____________
Adjusting journal entries:
6/30. Cederville evaluated its supplies, and noted that $6,000 of supplies had been used during the month.
__________________________________
____________
___________________________________
____________
6/30. Cederville records depreciation expense of $4,000 for the month of June.
__________________________________
____________
___________________________________
____________
6/30. Cederville recorded the rent expense for the month of June.
__________________________________
____________
___________________________________
____________
2. Post the journal entries to T-accounts and find the net debit or credit balance for each account:
Cash
Accounts Rec.
Medical Supplies
Prepaid Rent
Furnishings
Notes Payable
Dividends
Supplies Exp.
Equipment
Unearned revenues
Revenues
Utilities Exp.
Accumulated Depreciation
Class A Common Stock
Salaries Exp.
Rent expense
Accounts payable
Retained Earnings
Depreciation Exp.
3. From the T-account balances, prepare a Trial Balance for Cederville Clinic:
Debit
Cash
__________
Accounts Receivable
__________
Supplies
__________
Prepaid Rent
__________
Furnishings
__________
Equipment
__________
Credit
Accumulated depreciation
__________
Accounts Payable
__________
Notes Payable
__________
Unearned revenues
__________
Class A Common Stock
__________
Retained Earnings (beginning)
-0-
Revenues
__________
Salaries Expense
__________
Rent Expense
__________
Supplies Expense
__________
Depreciation Expense
__________
Utilities Expense
__________
Total
4. From the trial balance, complete the following financial statements for Cederville the month.
Cederville Clinic
Income statement
For the Month ending June 30, 2014
Total revenues
$____________
Salaries expense
$ ___________
Rent expense
___________
Supplies Expense
____________
Depreciation Expense
____________
Utilities Expense
____________
Total Expenses
$ ___________
Net income
$____________
Cederville Clinic
Statement of Stockholders’ Equity
For the Month ending June 30, 2014
Common Stock
$
0
___________
Beginning Balance, June 1
Add issue of Common Stock
Add Net income
Less Dividends
Ending Balance, June 30
Assets:
Cash
$___________
Retained Earnings
$
0
____________
( ____________)
$___________
$__________
Cederville Clinic
Balance Sheet at June 30, 2014
Liabilities & Stockholders’ Equity:
Accounts Pay.
$____________
Accounts Rec.
___________
Notes Pay.
Supplies
___________
Unearned revenues ____________
Prepaid rent
___________
Current assets
Total liabilities
________
Furnishings
_________
Equipment
_________
____________
____________
Common Stock
____________
Retained Earnings
____________
Total Stockholders’ Eq.
____________
Less: Accum Dep. ______
Net fixed assets
Total Assets
__________
$____________
Total Liabilities & SE
$____________
Cederville Clinic
Statement of Cash Flows
For the Month ending June 30, 2014
OPERATIONS:
Net Income
_______________
Depreciation Expense
_______________
Changes in current operating assets and liabilities:
Less: Increase in accounts receivable
_______________
Increase in supplies
_______________
Increase in prepaid rent
_______________
Plus: Increase in accounts payable
_______________
Increase in unearned revenues
_______________
Total cash from (to) operations
INVESTMENT:
Purchase of furnishings
_______________
Purchase of equipment
_______________
Total cash from (to) investing
FINANCING:
Issue class A common stock
_______________
Issue notes payable
_______________
Dividends to owners
_______________
Total cash from (to) financing
Increase (decrease) in cash
June 1, 2014 cash balance
June 30, 2014 cash balance
_________________
_________________
_________________
_________________
_______$0________
__________________