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 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 $ 8 Accounts Receivable 4 Supplies 4 Equipment 9 $ 2 Accumulated Depreciation Software 5 2 Accumulated Amortization Accounts Payable 5 0 Notes Payable (short-term) Salaries and Wages Payable Interest Payable 0 0 0 Income Taxes Payable Deferred Revenue 0 Common Stock Retained Earnings 7 Service Revenue 0 Depreciation Expense 0 Amortization Expense 0 Salaries and Wages Expense 0 Supplies Expense 0 Interest Expense 0 Income Tax Expense 0 Totals $ 30 $ 30 Transactions during 2021 (summarized in thousands of dollars) follow: a. Borrowed $18 cash on July 1, 2021, signing a six-month note payable. b. Purchased equipment for $21 cash on July 2, 2021. c. Issued additional shares of common stock for $4 on July 3. d. Purchased software on July 4, $4 cash. e. Purchased supplies on July 5 on account for future use, $6. f. Recorded revenues on December 6 of $53, including $10 on credit and $43 received in cash. g. Recognized salaries and wages expense on December 7 of $26; paid in cash. h. Collected accounts receivable on December 8, $7. i. Paid accounts payable on December 9, $8. j. Received a $4 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, $2. 1. Supplies of $4 were counted on December 31, 2021. m. Depreciation for 2021, $2. 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 $5 and will be paid in 2022. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) 14 Requirement General Journal General Ledger Trial Balance Income Statement Balance Sheet Retained Earnings Analysis 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.) No Date General Journal Debit Credit 1 July 01, 2021 Cash 18 Notes Receivable (short-term) x 18 2 July 02, 2021 21 Equipment Cash olol 21 July 03, 2021 Cash 4 Common Stock 4 4 OOOO 4 July 04, 2021 4 4 Software Cash 4 10 5 July 05, 2021 6 Supplies Accounts Payable 6 6 December 06, 202 Cash 53 X 10 Accounts Receivable Service Revenue 43 X 7 December 07, 202 Salaries and Wages Expense 26 Cash 0 26 8 8 December 08, 202 Cash 7 Accounts Receivable 0 7 9 December 09, 202 Accounts Payable 8 Cash 8 8 10 December 10, 202 Cash 4 4 Deferred Revenue 4 11 December 31, 202 Amortization Expense 2 Accumulated Amortization 2 2 12 8 X December 31, 202 Supplies Expense Supplies 8 13 2 December 31, 202 Depreciation Expense Accumulated Depreciation 2 14 1 > December 31, 202 Interest Expense Interest Payable 1 15 December 31, 202 Salaries and Wages Expense > 4 10 4 December 10, 202 Cash Deferred Revenue > 4 11 2 December 31, 202 Amortization Expense Accumulated Amortization 2 > > >> 12 8 December 31, 202 Supplies Expense Supplies 8 00 13 2 December 31, 202 Depreciation Expense Accumulated Depreciation 14 > 1 December 31, 202 Interest Expense Interest Payable 1 15 4 December 31, 202 Salaries and Wages Expense Salaries and Wages Payable 4 16 5 December 31, 202 Income Tax Expense Income Tax Payable 5 17 53 5 1X 29 X December 31, 202 Service Revenue Depreciation Expense Amortization Expense Salaries and Wages Expense Supplies Expense Interest Expense Income Tax Expense Retained Earnings 8 X 4 Answer is not complete. Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted, adjusted, or post-closing balances. Post-closing General Ledger Account Cash Accounts Receivable No. Date Debit Credit Balance No. Debit Credit Balance January 01, 2021 8 4 18 26 Date January 01, 2021 December 06, 2021 December 08, 2021 6 10 14 21 5 4 9 8 7 7 4 5 53 58 1 July 01, 2021 2 July 02, 2021 3 July 03, 2021 4 July 04, 2021 December 06, 6 2021 December 07, 7 2021 December 08, 8 2021 December 09, 9 2021 December 10, 10 2021 26 32 7 39 8 31 4 35 Notes Receivable (short-term) Supplies No. Date Debit Credit Balance Debit Credit Balance 0 4 1 July 01, 2021 18 (18) No. Date January 01, 2021 5 July 05, 2021 December 31, 12 2021 6 10 8 2 No. Date January 01, 2021 2 July 02, 2021 Date January 01, 2021 4 July 04, 2021 Date January 01, 2021 July 05, 2021 December 09, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 December 10, 2021 Date January 01, 2021 December 31, 2021 No. No. 5 9 No. 15 No. 10 No. 17 Equipment Debit 21 Software Debit Credit Credit 4 Accounts Payable Debit Credit 8 Salaries and Wages Payable Debit Credit Deferred Revenue Debit Retained Earnings Debit Credit Credit 6 4 4 4 Balance Balance Balance Balance Balance Balance 9 30 5 9 5 11 3 0 4 0 4 7 11 No. Date December 31, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 3 July 03, 2021 Date January 01, 2021 December 06, 2021 December 31, 2021 13 No. 11 No. 14 No. 16 No. No. Accumulated Depreciation Debit Credit Accumulated Amortization Debit Credit Interest Payable Debit Income Tax Payable Debit Common Stock Debit Service Revenue Debit 6 17 53 Credit Credit Credit Credit 2 2 1 5 4 43 Balance Balance Balance Balance Balance Balance 2 4 2 4 0 1 0 5 14 18 0 43 (10) Amortization Expense Depreciation Expense No. Debit Credit Balance No. Debit Credit Balance 0 0 Date January 01, 2021 December 31, 2021 December 31, 2021 t Date January 01, 2021 December 31, 2021 December 31, 2021 11 2 2 13 2 2 + 17 1 1 1 17 5 (3) Interest Expense Salaries and Wages Expense No. Debit Credit Balance No. Debit Credit Balance 0 0 o Date January 01, 2021 December 31, 2021 December 31, 2021 t 14 1 1 7 26 26 Date January 01, 2021 December 07, 2021 December 31, 2021 December 31, 2021 + 17 1 0 15 4 30 t 17 29 1 Supplies Expense Income Tax Expense No. Date Debit Credit Balance No. Date Debit Credit Balance 0 0 0 + 12 8 8 16 5 5 December 31, 2021 December 31, 2021 December 31, 2021 December 31, 2021 17 8 0 17 4 1 Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis 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. Post-closing NORTHLAND PHYSICAL THERAPY Income Statement For the Year Ended December 31, 2021 (in thousands) $ 0 0 o o 0 0 0 0 0 $ 0 (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 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. Post-closing 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 0 0 $ OO 0 0 0 boooo 0 0 0 0 0 0 0 0 (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis 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 Profit 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 December 31, 202 Interest Expense Interest Payable 1 15 December 31, 202 Salaries and Wages Expense > 4 10 4 December 10, 202 Cash Deferred Revenue > 4 11 2 December 31, 202 Amortization Expense Accumulated Amortization 2 > > >> 12 8 December 31, 202 Supplies Expense Supplies 8 00 13 2 December 31, 202 Depreciation Expense Accumulated Depreciation 14 > 1 December 31, 202 Interest Expense Interest Payable 1 15 4 December 31, 202 Salaries and Wages Expense Salaries and Wages Payable 4 16 5 December 31, 202 Income Tax Expense Income Tax Payable 5 17 53 5 1X 29 X December 31, 202 Service Revenue Depreciation Expense Amortization Expense Salaries and Wages Expense Supplies Expense Interest Expense Income Tax Expense Retained Earnings 8 X 4 Answer is not complete. Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted, adjusted, or post-closing balances. Post-closing General Ledger Account Cash Accounts Receivable No. Date Debit Credit Balance No. Debit Credit Balance January 01, 2021 8 4 18 26 Date January 01, 2021 December 06, 2021 December 08, 2021 6 10 14 21 5 4 9 8 7 7 4 5 53 58 1 July 01, 2021 2 July 02, 2021 3 July 03, 2021 4 July 04, 2021 December 06, 6 2021 December 07, 7 2021 December 08, 8 2021 December 09, 9 2021 December 10, 10 2021 26 32 7 39 8 31 4 35 Notes Receivable (short-term) Supplies No. Date Debit Credit Balance Debit Credit Balance 0 4 1 July 01, 2021 18 (18) No. Date January 01, 2021 5 July 05, 2021 December 31, 12 2021 6 10 8 2 No. Date January 01, 2021 2 July 02, 2021 Date January 01, 2021 4 July 04, 2021 Date January 01, 2021 July 05, 2021 December 09, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 December 10, 2021 Date January 01, 2021 December 31, 2021 No. No. 5 9 No. 15 No. 10 No. 17 Equipment Debit 21 Software Debit Credit Credit 4 Accounts Payable Debit Credit 8 Salaries and Wages Payable Debit Credit Deferred Revenue Debit Retained Earnings Debit Credit Credit 6 4 4 4 Balance Balance Balance Balance Balance Balance 9 30 5 9 5 11 3 0 4 0 4 7 11 No. Date December 31, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 December 31, 2021 Date January 01, 2021 3 July 03, 2021 Date January 01, 2021 December 06, 2021 December 31, 2021 13 No. 11 No. 14 No. 16 No. No. Accumulated Depreciation Debit Credit Accumulated Amortization Debit Credit Interest Payable Debit Income Tax Payable Debit Common Stock Debit Service Revenue Debit 6 17 53 Credit Credit Credit Credit 2 2 1 5 4 43 Balance Balance Balance Balance Balance Balance 2 4 2 4 0 1 0 5 14 18 0 43 (10) Amortization Expense Depreciation Expense No. Debit Credit Balance No. Debit Credit Balance 0 0 Date January 01, 2021 December 31, 2021 December 31, 2021 t Date January 01, 2021 December 31, 2021 December 31, 2021 11 2 2 13 2 2 + 17 1 1 1 17 5 (3) Interest Expense Salaries and Wages Expense No. Debit Credit Balance No. Debit Credit Balance 0 0 o Date January 01, 2021 December 31, 2021 December 31, 2021 t 14 1 1 7 26 26 Date January 01, 2021 December 07, 2021 December 31, 2021 December 31, 2021 + 17 1 0 15 4 30 t 17 29 1 Supplies Expense Income Tax Expense No. Date Debit Credit Balance No. Date Debit Credit Balance 0 0 0 + 12 8 8 16 5 5 December 31, 2021 December 31, 2021 December 31, 2021 December 31, 2021 17 8 0 17 4 1 Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis 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. Post-closing NORTHLAND PHYSICAL THERAPY Income Statement For the Year Ended December 31, 2021 (in thousands) $ 0 0 o o 0 0 0 0 0 $ 0 (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 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. Post-closing 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 0 0 $ OO 0 0 0 boooo 0 0 0 0 0 0 0 0 (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) Requirement General Journal General Ledger Trial Balance Income Statement Statement of Retained Earnings Balance Sheet Analysis 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 Profit 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