enviousjim
Oct 10, 2007, 09:17 AM
I am looking for an example on how these are computed???Any guidence please..
Selected transactions for Red River Classic Medical Practice, Inc., which occurred during the month of January 2004 follow. For each transaction indicate the effects on the accounting equation. An example is done for you.
Example: The company purchased a $6,000 piece of office furniture that is expected to last 5 years.
Solution: Assets are increased by $6,000 (Furniture account) and decreased by $6,000 (Cash account).
a. Paid $6,000 for 6 months rent on an office.
b. Purchased medical supplies for $7,000 on credit.
c. Provided $13,000 of services to customers. Received $5,000 cash at the time the work was provided and billed the remainder with 60 day terms.
d. Hired 5 employees who will not begin work until next month.
e. Paid $2,300 to a creditor to reduce a debt.
f. Collected $8,000 from customers billed in a previous month.
g. Distributed $16,000 to the owners.
Selected transactions for Red River Classic Medical Practice, Inc., which occurred during the month of January 2004 follow. For each transaction indicate the effects on the accounting equation. An example is done for you.
Example: The company purchased a $6,000 piece of office furniture that is expected to last 5 years.
Solution: Assets are increased by $6,000 (Furniture account) and decreased by $6,000 (Cash account).
a. Paid $6,000 for 6 months rent on an office.
b. Purchased medical supplies for $7,000 on credit.
c. Provided $13,000 of services to customers. Received $5,000 cash at the time the work was provided and billed the remainder with 60 day terms.
d. Hired 5 employees who will not begin work until next month.
e. Paid $2,300 to a creditor to reduce a debt.
f. Collected $8,000 from customers billed in a previous month.
g. Distributed $16,000 to the owners.