Meng Dai
ID:903692
Date: 9/04/2014
ACCT400

Illustrative problem:
J. F. Outz, M.D., organized Hearts Inc. three years ago to practice cardiology. During
April 2013, Hearts Inc. completed the following transactions:
Apr. 1. Paid office rent for April, $800.
3. Purchased equipment on account, $2,100.
5. Received cash on account from patients, $3,150.
8. Purchased X-ray film and other supplies on account, $245.
9. One of the items of equipment purchased on April 3 was defective. It was returned with the permission of the supplier, who agreed to reduce the account for the amount charged for the item, $325.
Paid cash to creditors on account, $1,250
Apr. 17. Paid cash for renewal of a six-month property insurance policy, $370.
20. Discovered that the balances of the cash account and the accounts payable account as of April 1 were overstated by $200. A payment of that amount to a creditor in March had not been recorded. Journalize the $200 payment as of April 20.
24. Paid cash for laboratory analysis, $545.
27. Paid dividends, $1,250.
30. Recorded the cash received in payment of services (on a cash basis) to patients during April, $1,720.
30. Paid salaries of receptionist and nurses, $1,725.
30. Paid various utility expenses, $360.
30. Recorded fees charged to patients on account for services performed in April,
$5,145.
30. Paid miscellaneous expenses, $132.
Hearts Inc.’s account titles, numbers, and balances as of April 1 (all normal balances) are listed as follows: Cash, 11, $4,123; Accounts Receivable, 12, $6,725; Supplies, 13, $290;
Prepaid Insurance, 14, $465; Equipment, 18, $19,745; Accounts Payable, 22, $765; Capital
Stock, 31, $10,000; Retained Earnings, 32, $20,583; Dividends, 33, $0; Professional Fees,
41, $0; Salary Expense, 51, $0; Rent Expense, 53, $0; Laboratory Expense, 55, $0; Utilities
Expense, 56, $0; Miscellaneous