Accounting principles

Balance Sheet Assets: Liabilities: Cash $500,000 Accounts Payable $200,000 Accounts Receivable 250,000 Short Term Note 100,000

Inventory 250,000 Long Term Debt 700,000 Equipment 350,000

Building 900,000 Total Liabilities: $_______

Total $_______ Fund Balance: $_______

{C}1. Calculate the beginning fund balance.

{C}2. During the accounting period $100,000 is billed to patients and $150,000 is collected. Show the effects of these transactions on the balance sheet.

{C}3. During the period, $60,000 in salaries is paid, $15,000 of inventory is used, $15,000 of depreciation of equipment is recorded and $10,000 of building depreciation is recognized, show the effects of these transactions on the balance sheet.

4.Additional transactions: pay off $50,000 of the short term note, purchase additional equipment for $50,000 in cash and receive $5,000 in rent, show the effects on the balance sheet.

{C}5. Prepare an income statement and balance sheet for this organization. Did the organization make or lose money from operations?

T-accounts

Assets Liabilities

Cash A/P

(debit) (credit) (debit) (credit)

-------------------------------- --------------------------------

$500,000 | | $200,000

| |

| |

A/R ST Note

-------------------------------- --------------------------------

$250,000 | | $100,000

| |

| |

Inventory LT Debt

-------------------------------- --------------------------------

$250,000 | | $700,000

| |

| |

Equipment

--------------------------------

$350,000 | Fund Balance

|

| Equity

(debit) (credit)

--------------------------------

Buildings |

-------------------------------- |

$900,000 | |

|