Saguaro Home Health provides home nursing services in the greater Phoenix area. When contacted by a client nurses visit with patient and discuss needed services with the physician of record.

Saguaro earns revenue from patient services. Most of the revenues come from billing insurance programs, the State of Arizona or the Medicare Program.

The following unadjusted trial balance for December 31, is available.

Saguaro Home Health

Unadjusted Trial Balance

December 31, 20XX

Debit Credit

Cash $ 77,400

Accounts Receivable, net 151,000

Medical Supplies 73,000

Extended Warranty 3,000

Automobiles 90,000

Accum. Depreciation, Automobiles $ 60,000

Building 200,000

Accum. Depreciation, Building 50,000

Accounts Payable 32,000

Mortgage payable 100,000

Saguaro Capital 249,900

Medical Services Revenue 550,000

Salary & Wages Expense 288,000

Gasoline Expense 137,500

Utilities Expense 12,000

Withdrawals 10,000 __________

Totals $1,041,900 $1,041,900

Complete the following adjusting entries.

Wages & salaries earned by employees at the end of December but not yet paid amount to $4,000.

Medical supplies on hand at December 31^st amounted to $8,653

The company owns 5 automobiles, that were all purchased at the same time and are replaced every three years. The vehicles typically have no salvage value and the depreciation methodology is straight line.

The building has an expected useful life of 20 years with no residual value. The depreciation methodology is straight line.

The company has purchased a three year extended warranty contract to cover the maintenance of its automobile fleet. The contract cost $9,000 (assume equal use each year).

Patient services provided but not yet recorded at year end totaled $16,000, net of allowance for doubtful accounts.

The company makes annual interest payments each June 30^th on the entire mortgage payable of $100,000. The mortgage interest rate is 6%.

1.Make the necessary adjustments on the attached worksheet and develop an adjusted trial balance.

2.Based upon the Adjusted Trial Balance generate an Income Statement, Statement of Owners Equity and Balance Sheet.

Saguaro Home Health Inc.

Adjusted Trial Balance Worksheet

For the Year Ended December 31, 200XX

Unadjusted Adjusted

Trial Balance Adjusting Entries Trial Balance

Debit Credit Debit Credit Debit Credit

Cash $ 77,400 ________ ________ ________ ________

Accounts Receivable, net 151,000 ________ ________ ________ ________

Medical Supplies 73,000 ________ ________ ________ ________

Extended Warranty 3,000 ________ ________ ________ ________

Automobiles 90,000 ________ ________ ________ ________

Accum. Depreciation, Automobiles $ 60,000 ________ ________ ________ ________

Building 200,000 ________ ________ ________ ________

Accum. Depreciation, Building 50,000 ________ ________ ________ ________

Accounts Payable 32,000 ________ ________ ________ ________

Interest Payable ________ ________ ________ ________

Salaries & Wages Payable ________ ________ ________ ________

Mortgage payable 100,000 ________ ________ ________ ________

Saguaro Capital 249,900 ________ ________ ________ ________

Medical Services Revenue 550,000 ________ ________ ________ ________

Salary & Wages Expense 288,000 ________ ________ ________ ________

Supplies Expense ________ ________ ________ ________

Gasoline Expense 137,500 ________ ________ ________ ________

Deprec Exp, Auto ________ ________ ________ ________

Deprec Exp, Bldg ________ ________ ________ ________

Utilities Expense 12,000 ________ ________ ________ ________

Interest Expense ________ ________ ________ ________

Extended Warranty Expense ________ ________ ________ ________

Withdrawals 10,000 __________ ________ ________ ________ ________

Totals $1,041,900 $1,041,900 ________ ________ ________ ________

Lable the adjusting entries with the proper letter.

Add adjusting and unadjusted balances to calculate the adjusted values.