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Adjusting Entries

The document provides accounting information for Dr. Kwak Quack's medical practice at the end of 2019, including account balances in the general ledger. It also lists adjustments that need to be made, including recognizing a full year of rent expense, calculating annual depreciation on equipment and furniture, adjusting for medical fees received in advance, supplies on hand, accrued taxes, an electric bill, and a provision for uncollectible accounts receivable.

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Cyreniel Claros
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541 views2 pages

Adjusting Entries

The document provides accounting information for Dr. Kwak Quack's medical practice at the end of 2019, including account balances in the general ledger. It also lists adjustments that need to be made, including recognizing a full year of rent expense, calculating annual depreciation on equipment and furniture, adjusting for medical fees received in advance, supplies on hand, accrued taxes, an electric bill, and a provision for uncollectible accounts receivable.

Uploaded by

Cyreniel Claros
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Sir Win – Accounting Lectures

 Jokes  Tagalog
 Stories  Legit Professor
 Life Lessons

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Adjusting Entries
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The following account balances appeared in the general ledger of Dr.


Kwak Quack at the end of December 2019, the second year of his medical
practice:

Cash 356,500
Accounts receivable 205,000
Allowance for bad debts 7,550
Medical supplies 11,500
Medical equipment 155,000
Accum. Depr. – medical equip. 15,500
Office furniture 96,000
Accum. Depr. – office furniture 2,000
Loans payable 200,000
Accounts payable 18,000
Quack, Capital 180,650
Quack, Withdrawals 42,000
Medical fees earned 729,000
Salaries expense 72,000
Rent expense 110,000
Taxes and licenses 9,000
Utilities expense 75,700
Interest expense 20,000
Sir Win – Accounting Lectures
 Jokes  Tagalog
 Stories  Legit Professor
 Life Lessons

Data for adjustments follows:

1. Rent expense, which was paid regularly by the doctor, represents


payment for rent from January to November only.

2. The estimated annual depreciation of the property and equipment is


10% per year of its acquisition cost. The medical equipment is part of
the doctor’s investment at the start of his practice on January 1, 2018
which had a market value then of 155,000 only. The office furniture
and equipment were acquired in two groups: 48,000 was acquired
August 1, 2018 and the balance were acquired six month after the
first acquisition

3. Included in the medical fees is 12,500 received in advance for


surgical services to be rendered early January

4. Only 2,750 of the supplies has not been used up

5. Taxes accrued at the end of the year amounted to 2,500

6. Received a bill from Meralco for electric consumption for the month
of December, 3,500

7. A provision for uncollectible accounts equal to 5% of the outstanding


receivables is deemed reasonable

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