1 C4-3 (Algo) Recording Transactions (Including Adjusting Entries), Preparing Financial Statements and Closing Entries, General Ledger and Computing Net Profit Margin and Current Ratio (Chapters 2, 3, and 4) [LO 2-3, LO 3-3, LO 4-1, LO 4-2, LO 4-3, LO 802.38.26 Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2020. The annual reporting period ends December 31. The trial balance on January 1, 2021, was as follows (the amounts are rounded to thousands of dollars to simplify): Account Titles Debit Credit Cash $6 eBook 2 Accounts Receivable Supplies 2 Equipment Accumulated Depreciation Software Print Accumulated Amortization Accounts Payable References Notes Payable (short-term) Salaries and Wages Payable Interest Payable Income Taxes Payable Deferred Revenue Common Stock Retained Earnings Service Revenue Depreciation Expense Amortization Expense Salaries and Wages Expense Supplies Expense Interest Expense Income Tax Expense Totals $ 28 $ 28 Transactions during 2021 (summarized in thousands of dollars) follow: a. Borrowed $13 cash on July 1, 2021, signing a six-month note payable. b. Purchased equipment for $16 cash on July 2, 2021. c. Issued additional shares of common stock for $6 on July 3. d. Purchased software on July 4, $2 cash. e. Purchased supplies on July 5 on account for future use. $8. Recorded revenues on December 6 of $47, including $9 on credit and $38 received in cash, g. Recognized salaries and wages expense on December 7 of $21; paid in cash. h. Collected accounts receivable on December 8, $8. Paid accounts payable on December 9, $9. Received a $2 cash deposit on December 10 from a hospital for a contract to start January 5, 2022 Data for adjusting journal entries on December 31: 100 points 10 20 1 ints 02:38:04 eBook Print References Transactions during 2021 (summarized in thousands of dollars) follow: a. Borrowed $13 cash on July 1, 2021, signing a six-month note payable. b. Purchased equipment for $16 cash on July 2, 2021. c. Issued additional shares of common stock for $6 on July 3. d. Purchased software on July 4, $2 cash. e. Purchased supplies on July 5 on account for future use, $8. f. Recorded revenues on December 6 of $47, including $9 on credit and $38 received in cash. g. Recognized salaries and wages expense on December 7 of $21; paid in cash. h. Collected accounts receivable on December 8, $8. 1. Paid accounts payable on December 9, $9. J. Received a $2 cash deposit on December 10 from a hospital for a contract to start January 5, 2022. Data for adjusting journal entries on December 31: k. Amortization for 2021, $3. 1. Supplies of $2 were counted on December 31, 2021. m. Depreciation for 2021, $3, n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) General Requirement General Journal Trial Balance Ledger Income Statement Statement of Retained Earnings Balance Sheet Analysis General Journal tab- Prepare the journal entries to record the transactions (a) through (). Review the accounts as shown in the General Ledger and Trial Balance tabs. Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. General Ledger tab - Each journal entry is posted automatically to the general ledger. Use the drop-down button to view. the unadjusted, adjusted, or post-closing balances in the General Ledger. Trial Balance tab - You may view either the unadjusted, adjusted, or post-closing trial balance by choosing from the drop-down. Income Statement tab - Use the drop-down to select the accounts properly included on the income statement. The unadjusted, adjusted, or post-closing balances will appear for each account based on your selection. Statement of Retained Earnings tab - Prepare the statement of retained earnings for the year ended December 31, 2021. Balance Sheet tab - Use the drop-down to select the accounts to properly included on the balance sheet. The unadjusted, adjusted, or post-closing balances will appear for each account, based on your selection. Analysis tab - Using the information from the requirements above, complete the 'Analysis' tab. Requirement General Journal > n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) General Journal Requirement General Ledger Statement of Retained Income Statement Trial Balance Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 17 Borrowed $13 cash on July 1, 2021, signing a six-month note payable. Record the transaction. Note: Enter debits before credits Date General Journal Debit Credit July 01, 2021 Clear entry View general journal General Ledger > Record entry Record entry n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) Statement of 36.48 General Requirement General Journal Trial Balance Income Statement Ledger Retained Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Debit m. Depreciation for 2021, 33. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 36:30 General General Journal Requirement Statement of Retained Income Statement Trial Balance Balance Sheet Analysis Ledger Earnings Prepare the journal entries to record transactions (a) through (). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet m. Depreciation for 2021, 33. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 15 General Journal Requirement General Ledger Trial Balance Statement of Retained Income Statement Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (1). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet ces Record entry ces Record entry Requirement m. Depreciation for 2U21, $3. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 3 General Journal Requirement General Ledger Statement of Retained Income Statement Trial Balance Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (f). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31, (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.). View transaction list Journal entry worksheet m. Depreciation for 2021, 33. n. Accrued interest of $1 on notes payable. a. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 3:01 General Journal Requirement General Ledger Statement of Retained Income Statement Trial Balance Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet ces Record entry Debit 02:34:39 Book O erences m. Depreciation for 2U21, 33. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) Statement of Requirement General Journal General Ledger Trial Balance Income Statement Retained Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (1). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record entry 1 Es 02:34:06 eBook Print ferences m. Depreciation for 2021, $3. n. Accrued interest of $1 on notes payable. a Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (l.e., $100,000 should be entered as $100).) General Journal Requirement General Ledger Statement of Retained Income Statement Trial Balance Balance Sheet) Analysis Earnings Prepare the journal entries to record transactions (a) through (). Then prepare the necessary adjusting entries (K) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet 1 ***** 9 10 11 12 13 14 17 Accrued interest of $1 on notes payable. Record the adjusting entry. Note: Enter debits before credits. Date General Journal Debit December 31, 2021 Clear entry Record entry m. Depreciation for 2021, 33. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 3:51 General Journal Requirement General Ledger Statement of Retained Income Statement Trial Balance Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet m. Depreciation for 2021, 33. n. Accrued interest of $1 on notes payable. a Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 39 General Journal Requirement General Ledger Statement of Retained Income Statement Trial Balance Balance Sheet Analysis Earnings Prepare the journal entries to record transactions (a) through (). Then prepare the necessary adjusting entries (k) through (p) to correctly report net income for the period. Then record the closing entry as of December 31. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) View transaction list Journal entry worksheet Record entry No. No. Debit Software Credit Credit Credit Debit Accounts Payable Debit Retained Earnings Debit Credit Credit m. Depreciation for 2021, 33. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 58 Statement of Requirement General Journal General Ledger Trial Balance Income Statement Retained Balance Sheet Analysis Earnings Notice the dropdown below that gives the options to select the unadjusted, adjusted or post-closing trial balance. The option you choose will be the values used to populate the income statement and balance sheet tabs. Unadjusted NORTHLAND PHYSICAL THERAPY Trial Balance December 10, 2021 Debit Credit Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Common Stock Retained Earnings Total 0000000000 Account Title $ 6 2 2 10 8 28 $ 3 3 6 13 3 28 m. Depreciation for 2021, $3. n. Accrued interest of $1 on notes payable. a. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 32:48 Statement of Requirement General Journal General Ledger Trial Balance Income Statement Retained Balance Sheet Analysis Earnings Choose the appropriate accounts to be reported on the income statement. Select the 'adjusted' from the dropdown, which will then populate the balances in those accounts from the trial balance. Unadjusted NORTHLAND PHYSICAL THERAPY Income Statement. For the Year Ended December 31, 2021 (in thousands). int ances c. Issued additional shares of common stock for $6 on July 3. d. Purchased software on July 4, $2 cash. e. Purchased supplies on July 5 on account for future use, $8. f. Recorded revenues on December 6 of $47, including $9 on credit and $38 received in cash. g. Recognized salaries and wages expense on December 7 of $21; paid in cash. h. Collected accounts receivable on December 8, $8. Paid accounts payable on December 9, $9. J. Received a $2 cash deposit on December 10 from a hospital for a contract to start January 5, 2022. Data for adjusting journal entries on December 31: k. Amortization for 2021, $3. L. Supplies of $2 were counted on December 31, 2021. m. Depreciation for 2021, $3. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) Statement of General Requirement Journal General Ledger Trial Balance Income Statement Analysis Retained Balance Sheet Earnings Prepare the statement of retained earnings for the year ended December 31, 2021. You will need to determine and enter the accounts and balances to prepare the Statement of Retained Earnings. Unadjusted NORTHLAND PHYSICAL THERAPY Statement of Retained Earnings For the Year Ended December 31, 2021 (in thousands) Balance Sheet > Balance, January 1, 2021 Balance, December 31, 2021 S y avail c. Issued additional shares of common stock for $6 on July 3. d. Purchased software on July 4, $2 cash. e. Purchased supplies on July 5 on account for future use, $8. Recorded revenues on December 6 of $47, including $9 on credit and $38 received in cash. g. Recognized salaries and wages expense on December 7 of $21; paid in cash. h. Collected accounts receivable on December 8, $8. 1. Paid accounts payable on December 9, $9. J. Received a $2 cash deposit on December 10 from a hospital for a contract to start January 5, 2022. Data for adjusting journal entries on December 31: k. Amortization for 2021, $3. 1. Supplies of $2 were counted on December 31, 2021. m. Depreciation for 2021, $3. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $4. p. Income tax expense for 2021 was $3 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) General Income Requirement General Journal Statement of Retained Trial Balance Ledger Balance Sheet Analysis Statement Earnings Calculate the Net Pofit Margin and Current Ratio. Net income can be found on Income statement tab. (Hint: Select Adjusted on the dropdown.) How much net income did Northland Physical Therapy, generate during 2021? What was its net profit margin? (Round "Net Profis Margin to 1 decimal place) Net Income Net Profit Margin % Is the business financed primarily by liabilities or stockholders' equity? What is the current ratio? (Round your answer to 2 decimal places) Current Ratio