Employee salaries, medical supplies, depreciation, and gasoline are the major expenses Employees are paid every Friday for work performed during the Saturday-to-Friday pay period. Slanes amount to $800 per day. In 2016 December 31 falls on a Saturday, Medical supplies (avcage use of S1,500 per week) are purchased periodically to support healthcare coverage. The inventory of supplies on band on December 31 amounted to $8,653. The firm owns five automobiles (all purchased at the same time) that average 50,000 miles per year and are replaced every three years. They typically have no residual value. The building has an expected life of 20 years with no residual value Straight line depreciation is used on all of the firm's acts. Gasoline costs, which are a cash expenditure, average $375 per day. The firm purchases a three-year extended warranty contract to cover maintenance costs. The contract costs 59,000. (Assume equal use each year.) On December 29, 2016, Mountain Home Health declared a dividend of $10,000. payable on January 15, 2017. The firm makes annual mortgage payments of principal and interest each June 30. The interest rate on the mortgage is 6% The following unadjusted trial balance is available for Mountain Home Health on December 31.2010 Mountain Home Health Inc. Unadjusted Trial Balance December 31, 2016 Debat Credit $ 77,400 151.000 73.000 3.000 90.000 $ 60.000 200.000 Receivable net Medical Supplies Extended Warranty Automobiles Accumulated Depreciation Automobiles Building Accumulated Depreciation-Building Accounts Payable Dividend Payable Mortgage Payable Cantal Stock Aditional Paid-in Capital Retained Earn Medical Services Revenue Salary and Wages Expense Gasoline Expense Utes Expense Dividends Total 50,000 22 000 10.000 100.000 100.000 50.000 99,900 550,000 288.000 137.500 12,000 10.000 $1,041,000 $1,041,900 Required 1 Set up T accounts for cach of the accounts listed on the trial balance. Based on the informa tion provided, set up any other T accounts that will be needed to prepare adjusting entries Post the year end adjusting entries directly to the T accounts but do not bother to put the entries in journal format first. 3. Prepare an income statement and a statement of retained earnings for Mountain Home Health for the year ended December 31, 2016. + Prepare a balance sheet for Mountain Home Health as of December 31, 2016. (Continued Salary and Wages Expense Gasoline Expense Utilities Expense Dividends Totals 288,000 137,500 12,000 10,000 $1,041,900 $1,041,900 Required 1. Set up T accounts for each of the accounts on the trial balance. Based on the informa- tion provided, set up any other T accounts that will be needed to prepare adjusting entries. 2. Post the year-end adjusting entries directly to the T accounts but do not bother to put the entries in journal format first. 3. Prepare an income statement and a statement of retained earnings for Mountain Home Health for the year ended December 31, 2016. 4. Prepare a balance sheet for Mountain Home Health as of December 31, 2016. (Continued) Employee salaries, medical supplies, depreciation, and gasoline are the major expenses Employees are paid every Friday for work performed during the Saturday-to-Friday pay period. Slanes amount to $800 per day. In 2016 December 31 falls on a Saturday, Medical supplies (avcage use of S1,500 per week) are purchased periodically to support healthcare coverage. The inventory of supplies on band on December 31 amounted to $8,653. The firm owns five automobiles (all purchased at the same time) that average 50,000 miles per year and are replaced every three years. They typically have no residual value. The building has an expected life of 20 years with no residual value Straight line depreciation is used on all of the firm's acts. Gasoline costs, which are a cash expenditure, average $375 per day. The firm purchases a three-year extended warranty contract to cover maintenance costs. The contract costs 59,000. (Assume equal use each year.) On December 29, 2016, Mountain Home Health declared a dividend of $10,000. payable on January 15, 2017. The firm makes annual mortgage payments of principal and interest each June 30. The interest rate on the mortgage is 6% The following unadjusted trial balance is available for Mountain Home Health on December 31.2010 Mountain Home Health Inc. Unadjusted Trial Balance December 31, 2016 Debat Credit $ 77,400 151.000 73.000 3.000 90.000 $ 60.000 200.000 Receivable net Medical Supplies Extended Warranty Automobiles Accumulated Depreciation Automobiles Building Accumulated Depreciation-Building Accounts Payable Dividend Payable Mortgage Payable Cantal Stock Aditional Paid-in Capital Retained Earn Medical Services Revenue Salary and Wages Expense Gasoline Expense Utes Expense Dividends Total 50,000 22 000 10.000 100.000 100.000 50.000 99,900 550,000 288.000 137.500 12,000 10.000 $1,041,000 $1,041,900 Required 1 Set up T accounts for cach of the accounts listed on the trial balance. Based on the informa tion provided, set up any other T accounts that will be needed to prepare adjusting entries Post the year end adjusting entries directly to the T accounts but do not bother to put the entries in journal format first. 3. Prepare an income statement and a statement of retained earnings for Mountain Home Health for the year ended December 31, 2016. + Prepare a balance sheet for Mountain Home Health as of December 31, 2016. (Continued Salary and Wages Expense Gasoline Expense Utilities Expense Dividends Totals 288,000 137,500 12,000 10,000 $1,041,900 $1,041,900 Required 1. Set up T accounts for each of the accounts on the trial balance. Based on the informa- tion provided, set up any other T accounts that will be needed to prepare adjusting entries. 2. Post the year-end adjusting entries directly to the T accounts but do not bother to put the entries in journal format first. 3. Prepare an income statement and a statement of retained earnings for Mountain Home Health for the year ended December 31, 2016. 4. Prepare a balance sheet for Mountain Home Health as of December 31, 2016. (Continued)
