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): Debit Credit $ 7 mmo in 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 Amortization Expense Salaries and Wages Expense Supplies Expense Interest Expense Income Tax Expense Totals $27 $27 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.) Journal entry worksheet 2 3 4 5 6 7 8 Borrowed $17 cash on July 1, 2018, signing a six-month note payable. Record the transaction. Note: Enter debits before credits. General Journal Debit Credit Date Jul 01, 2018 Record entry Clear entry View general journal Journal entry worksheet Purchased supplies on July 5 on account for future use, $7. Record the transaction. Note: Enter debits before credits. General Journal Debit Credit Date Jul 05, 2018 Record entry Clear entry View general journal Journal entry worksheet Recognized salaries and wages expense on December 7 of $25; paid in cash. Note: Enter debits before credits. Date General Journal Debit Credit Dec 07, 2018 Record entry Clear entry View general journal Journal entry worksheet Depreciation for 2018, $4. Record the transaction. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31, 2018 Record entry Clear entry View general journal Journal entry worksheet Income tax expense for 2018 was $4 and will be paid in 2019. Record the transaction. Note: Enter debits before credits. General Journal Debit Credit Date Dec 31, 2018 Record entry Clear entry View general journal Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted, adjusted, or post-closing balances. Unadjusted - General Ledger Account Cash Accounts Receivable No. Debit Credit Balance No. Debit Credit Balance Date Jan 01, 2018 Date Jan 01, 2018 Supplies Debit Equipment Debit No. Credit Balance No. Credit Balance Date Jan 01, 2018 Date Jan 01, 2018 Accumulated Depreciation Equipment Date Debit Credit Jan 01, 2018 Software Debit No. Balance No. Credit Balance Date Jan 01, 2018 Accounts Payable Debit Credit No. Accumulated Amortization Date / Debit Credit Jan 01, 2018 Balance No. Balance Date Jan 01, 2018 Retained Earnings Common Stock Debit Credit No. Balance No. Debit Credit Balance Date Jan 01, 2018 Date Jan 01, 2018 15 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, 2018 Account Title Debit Credit Equipment Cash Accounts Receivable Supplies Equipment Accumulated Depreciation Software Accumulated Amortization Accounts Payable Common Stock *Retained Earnings Total 27 $ 27 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, 2018 (in thousands) olo Prepare the statement of retained earnings for the year ended December 31, 2018. 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, 2018 (in thousands) Balance, January 1, 2018 Balance, December 31, 2018 Calculate the Net Pofit Margin and Current Ratio. Net income can be found on Income statement tab. (Hint: Select Adjusted on the dropdown.) Unadjusted Dates: Jan 01, 2015 - to: Dec 10, 2018 - How much net income did Northland Physical Therapy, Inc., generate during 2018? What was its net profit margin? (Round "Net Profit Margin" to 1 decimal place.) Net Income Net Profit Margin Is the company financed primarily by liabilities or stockholders' equity? What is the current ratio? (Round your answer to 2 decimal places.) Current Ratio