Class – Please attempt this exercise and see what you come up with. Please do not attach a file with your response, instead write or copy and paste your answer into the threads. Thanks.
Paul
E2-16A
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Order Paper NowBob Morin opened a medical practice specializing in surgery. During the first month of operation (August), the business, titled Bob Morin, Professional Corporation (P.C.), experienced the following events:
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Aug 6 |
Morin invested $39,000 in the business, which in turn issued its common stock to him. |
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9 |
The business paid cash for land costing $29,000. Morin plans to build an office building on the land. |
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12 |
The business purchased medical supplies for $1,700 on account. |
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15 |
Bob Morin, P.C., officially opened for business. |
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15–31 |
During the rest of the month, Morin treated patients and earned service revenue of $7,600, receiving cash for half the revenue earned. |
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15–31 |
The business paid cash expenses: employee salaries, $1,300; office rent, $700; utilities, $500. |
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31 |
The business sold supplies to another physician for cost of $700. |
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31 |
The business borrowed $12,000, signing a note payable to the bank. |
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31 |
The business paid $800 on account. |
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▸Requirements
- 1. Analyze the effects of these events on the accounting equation of the medical practice of Bob Morin, P.C.
- 2. After completing the analysis, answer these questions about the business.
- a. How much are total assets?
- b. How much does the business expect to collect from patients?
- c. How much does the business owe in total?
- d. How much of the business’s assets does Morin really own?
- e. How much net income or net loss did the business experience during its first month of operations?
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