Dr. Schekter, DVM, opened a veterinary clinic on May 1, current year. The business transactions for May are shown as follows. May 1 Dr. Schekter invested $480,000 cash in the business in exchange for 6,000 shares of capital stock. May 4 Land and a building were purchased for $300,000. Of this amount, $84,000 applied to the land, and $216,000 to the building. A cash payment of $120,000 was made at the time of the purchase, and a note payable was issued for the remaining balance. May 9 Medical instruments were purchased for $156,000 cash. May 16 Office fixtures and equipment were purchased for $60,000. Dr. Schekter paid $24,000 at the time of purchase and agreed to pay the entire remaining balance in 15 days. May 21 Office supplies expected to last several months were purchased for $6,000 cash. May 24 Dr. Schekter billed clients $2,640 for services rendered. Of this amount, $2,280 was received in cash, and $360 was billed on account (due in 30 days). May 27 A $480 invoice was received for several radio advertisements aired in May. The entire amount is due on June 5. May 28 Received a $120 payment on the $360 account receivable recorded May 24. May 31 Paid employees $3,360 for salaries earned in May. A partial list of account titles used by Dr. Schekter includes the following. Cash Accounts Receivable Office Supplies Medical Instruments Office Fixtures and Equipment Land Building Notes Payable Accounts Payable Capital Stock Veterinary Service Revenue Advertising Expense Salary Expense Required: a. Analyze the effects that each of these transactions will have on the following six components of the company's financial statements for the month of May. Select I for increase, D for decrease, and NE for no effect in the column headings below to show the effects of the above transactions. The May 1 transaction is provided for you. b. Prepare journal entries for each of the above transactions. c. Post each transaction to the appropriate T account. d. Prepare a trial balance dated May 31, current year. e. Using figures from the trial balance prepared in part d, compute total assets, total liabilities, and owners' equity. Did May appear to be a profitable month? Complete this question by entering your answers in the tabs below. Required A Required B Required C Required D Required E Post each transaction to the appropriate T account. Cash Notes Payable Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Required E Post each transaction to the appropriate T account. Notes Payable Cash 480,000 May 01 180,000 May 16 May 16 May 27 May 31 Bal. 180.000 May 24 2.280 120.000 150.000 24,000 6.000 3.360 May 31 May 28 May 31 Bal. 120 173.040 Accounts Payable Accounts Receivable 360 May 24 May 28 May 31 Bal. May 16 May 27 360 May 31 Bal. Office Supplies Capital Stock May 24 May 31 Bal. 0 May 31 Bal. 0 Medical Instruments Veterinary Service Revenue May 00 May 31 Bal 0 May 31 Bal. 0 Office Fixtures and Equipment Advertising Expense May 16 May 31 Bal. 0 May 31 Bal. Land Salary Expense May 31 Bal. 0 May 31 Bal. Building May 31 Bal. 0 Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Required E Credit Prepare a trial balance dated May 31, current year. DR. SCHEKTER, DVM Trial Balance May 31, Current Year Debit Cash s 173,040 Accounts receivable Land Building Medical instruments Office fixtures and equipment Accounts payable Notes payable Capital stock Veterinary service revenue Salary expense Advertising expense Office supplies $ 173,040 $ 0 Complete this question by entering your answers in the tabs below. Required A Required B Required Required D Required E Using figures from the trial balance prepared in part d, compute total assets, total liabilities, and owners' equity. Did May appear to be a profitable month? Total assets Total liabilities Total owners' (stockholders') equity
