Dr. Ivan Ricaa, upon completing a residency program at Chong Hua Hospital, established a medical practice in Magallanes, Cebu City. During October 2020, the first month of operations, the following transactions occurred: Oct. 1 - Dr. Ricaa transferred P250,000 from his personal checking account to bank account, Dr. Ivan Ricaa, M.D. 1 - A medical clinic, P1,000,000 and land, P250,000 were acquired by paying P50,000 in cash and issuing a 5-year, 20% note payable (interest is payable every 6 months) for the P1,200,000 balance. 1 - Acquired medical equipment costing P420,000 and medical supplies amounting to P39,000 by paying P59,000 cash and issuing a 24% note payable, maturing in 6 months, for the P400,000 balance. 2 - Aquired "all-in-one" insurance for a year, P20,000. 4 - Received cash form patients amounting to P117,000. 7 - Bought medical supplies on account from Magallanes Supply, P17,000. 10 - Paid salaries of nurses and office staff, P73,000. 12 - Received P90,000 from the Cebu City Experimental Drug Center for research to be conducted by Dr. Ricaa over the next 3 months. 18 - Billed patients P317,000 for services rendered. 21 - Paid P23,000 for repairs to the medical equipment. 23 - Paid the telephone bill, P3,000. 24 - Bought medical equipment on account from Dr. Plaza, P45,000. 24 - Collected P113,000 from patients billed on the 18th. 27 - Paid P13,000 on account to Magallanes Supply. 30 - Withdrew P200,000 in cash from the medical practice. 30 - Paid P15,000 dues to the Cebu City Medical Association. Required: 1. Establish the following accounts in a ledger (T-account). Accounts: Cash Ricaa, Capital Accounts Receivable Ricaa, Withdrawals Medical Supplies Income Summary Prepaid Insurance Medical Revenues Land Research Revenues Medical Building Salaries Expense Accumulated Depreciation - Insurance Expense Medical Building Medical Equipment Repairs Expense Supplies Expense Accumulated Depreciation - Association Dues Expense Medical Equipment Telephone Expense 24% Notes Payable Depreciation Expense-Bldg. 20% Notes Payable Depreciation Expense- Equipt. Accounts Payable Interest Expense Salaries Payable Interest Payable Unearned Research Revenues 2. Record the transactions for the month of October in a journal and post the entries to the ledger (T-account). Use Asset Method and Liability Method to record transactions that will require adjustments. 3. Prepare a trial balance on a worksheet and record the following adjustments on the worksheet. a. Insurance for one month has expired. b. Medical supplies on hand at month-end amounted to P21,000. C. Depreciation on the medical building and on the medical equipment is P5,000 and P9,000, respectively. d. Unearned research revenues in the amount of P30,000 have been earned. Salaries of P51,000 have accrued. f. Interest on the 20% and 24% notes are P20,000 and P8,000, respectively. e. 4. Complete the worksheet
