C4-3 Recording Transactions (Including Adjusting Journal Entries), Preparing Financial Statements and Closing Journal Entries, 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 4-4, L Drs. Glenn Feltham and David Ambrose began operations of their physical therapy clinic, called Northland Physical Therapy, on January 1, 2017. The annual reporting period ends December 31. The trial balance on January 1, 2018, was as follows (the amounts are rounded to thousands of dollars to simplify): Credit Debit $ 8 4 4 8 $ 2 5 Account Titles Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Notes Payable (short-term) Salaries and Wages Payable Interest Payable Income Taxes Payable Deferred Revenue Common Stock Retained Earnings Service Revenue Depreciation Expense Amort tion Expense Salaries and Wages Expense Supplies Expense Interest Expense Income Tax Expense Totals 2 5 0 0 0 n 0 14 6 0 0 0 0 0 0 0 sz: $29 $29 Transactions during 2018 (summarized in thousands of dollars) follow: a. Borrowed $30 cash on July 1, 2018, signing a six-month note payable. b. Purchased equipment for $33 cash on July 2, 2018. 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 $65, including $10 on credit and $55 received in cash. g. Recognized salaries and wages expense on December 7 of $38; 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, 2019. Data for adjusting journal entries on December 31: k. Amortization for 2018, $2. 1. Supplies of $4 were counted on December 31, 2018. m. Depreciation for 2018, $2. n. Accrued interest of $1 on notes payable. o. Salaries and wages incurred but not yet paid or recorded, $2. p. Income tax expense for 2018 was $5 and will be paid in 2019. (Enter all of your answers in thousands of dollars. (i.e., $100,000 should be entered as $100).) View transaction list X 1 Borrowed $30 cash on July 1, 2018, signing a six-month note payable. Record the transaction. 2 Purchased equipment for $33 cash on July 2, 2018. Record the transaction. 3 Issued additional shares of common stock for $4 on July 3. Record the transaction. 4 Purchased software on July 4, $4 cash. Record the transaction. 5 Purchased supplies on July 5 on account for future use, $6. Record the transaction. X 6 Recorded revenues on December 6 of $65, including $10 on credit and $55 received in cash. Record the transaction. 7 Recognized salaries and wages expense on December 7 of $38; paid in cash. 8 Collected accounts receivable on December 8, $7. Record the transaction. 9 Paid accounts payable on December 9, $8. Record the transaction. 10 Received a $4 cash deposit on December 10 from a hospital for a contract to start January 5, 2019. Record the transaction. 11 Amortization for 2018, $2. Record the transaction. 12 Supplies of $4 were counted on December 31, 2018. Record the transaction. 13 Depreciation for 2018, $2. Record the transaction. 14 Accrued interest of $1 on notes payable. Record the transaction. 15 Salaries and wages incurred not yet paid or recorded, $2. Record the transaction. 16 Income tax expense for 2018 was $5 and will be paid in 2019. Record the transaction. 17 Record entry to close revenue and expense accounts to retained earnings. Combine the closing of revenue and expenses into one entry. General Ledger Account Cash Accounts Receivable No. Date Debit Credit Balance No. Date Debit Credit Balance Jan 01, 2018 8 Jan 01, 2018 4 Supplies Equipment No. Date Debit Credit Balance No. Date Debit Credit Balance Jan 01, 2018 Jan 01, 2018 8 Accumulated Depreciation Equipment Software No. Date Debit Credit Balance No. Date Debit Credit Balance Jan 01, 2018 2 Jan 01, 2018 5 Accumulated Amortization Accounts Payable No. Date Debit Credit Balance No. Date Debit Credit Balance Jan 01, 2018 2 Jan 01, 2018 5 Common Stock Retained Earnings No. Date Debit Credit Balance No. Date Debit Credit Balance Jan 01, 2018 14 Jan 01, 2018 6