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Unadjusted Trial Balance for Dr. Marasigan

The document contains a trial balance for Dr. Nick Marasigan for October 2015 with account balances, transactions, and explanations. It shows assets of $2,423,000 equal to liabilities and equity of $2,423,000. Adjusting entries were made for expenses such as insurance, supplies, depreciation, salaries, and interest. The financial statements prepared include an income statement showing a profit of $220,333, statement of equity showing an ending capital balance of $270,333, and a balance sheet with total assets of $2,058,333 equal to total liabilities and equity.

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32K views6 pages

Unadjusted Trial Balance for Dr. Marasigan

The document contains a trial balance for Dr. Nick Marasigan for October 2015 with account balances, transactions, and explanations. It shows assets of $2,423,000 equal to liabilities and equity of $2,423,000. Adjusting entries were made for expenses such as insurance, supplies, depreciation, salaries, and interest. The financial statements prepared include an income statement showing a profit of $220,333, statement of equity showing an ending capital balance of $270,333, and a balance sheet with total assets of $2,058,333 equal to total liabilities and equity.

Uploaded by

Angelito Eclipse
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
  • Transaction Entries
  • Unadjusted Trial Balance
  • Adjusting Entries
  • Financial Statements
  • Balance Sheet
  • Statement of Changes in Equity
  • Closing Entries
  • Post-Closing Trial Balance
  • Reversing Entries

DATE ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT

Oct 1 Cash 250,000


Marasigan, Capital 250,000

1 Medical Building 1,000,000


Land 250,000
Cash 50,000
20% Notes Payable 1,200,000

1 Medical Equipment 420,000


Medical Supplies 39,000
Cash 59,000
24% Notes payable 400,000

2 Prepaid Insurance 20,000


Cash 20,000

4 Cash 117,000
Medical Revenues 117,000

7 Medical Supplies 17,000


Accounts Payable 17,000

10 Salaries Expense 73,000


Cash 73,000

12 Cash 90,000
Unearned Research Revenues 90,000

18 Account Receivable 317,000


Medical Revenues 317,000

21 Repairs Expense 23,000


Cash 23,000

23 Telephone Expense 3,000


Cash 3,000

24 Medical Equipment 45,000


Accounts Payable 45,000

25 Cash 113,000
Accounts Receivable 113,000

27 Accounts Payable 13,000


Cash 13,000
30 Marasigan, Withdrawals 200,000
Cash 200,000

30 Association Dues Expense 15,000


Cash 15,000
POINT SYSTEM= 1 POINT PER TRANSACTION (TOTAL = 16 POINTS)
T- ACCOUNT: (1 POINT PER ACCOUNT) TOTAL = 18 POINTS
ENDING BALANCES
CASH = 114,000 DR
ACCOUNT RECEIVABLE = 204,000 DR
MEDICAL SUPLLIES= 56,000 DR
PREPAID INSURANCE = 20,000 DR
LAND= 250,000
MEDICAL BUILDING = 1,000,000 DR
MEDICAL EQUIPMENT = 465,000 DR
24% NOTES PAYABLE = 400,000 CR
20% NOTES PAYABLE =1,200,000 CR
ACCOUNTS PAYABLE= 49,000 CR
UNEARNED RESEARCH REVENUES= 90,000 CR
MARASIGAN, CAPITAL= 250,000 CR
MARASIGAN, WITHDRAWALS= 200,000 DR
MEDICAL REVENUES= 434,000 CR
SALARIES EXPENSE = 73,000 DR
REPAIR EXPENSE= 23,000 DR
ASSOCIATION DUES EXPENSE= 15,000 DR
TELEPHONE EXPENSE = 3,000

DR. NICK MARASIGAN, MD


UNADJUSTED TRIAL BALANCE
OCTOBER 2015
ACCOUNT TITLES DEBIT CREDIT
CASH 114,000
ACCOUNT RECEIVABLE 204,000
MEDICAL SUPLLIES 56,000
PREPAID INSURANCE 20,000
LAND 250,000
MEDICAL BUILDING 1,000,000
MEDICAL EQUIPMENT 465,000
24% NOTES PAYABLE 400,000
20% NOTES PAYABLE 1,200,000
ACCOUNTS PAYABLE 49,000
UNEARNED RESEARCH REVENUES 90,000
MARASIGAN, CAPITAL 250,000
MARASIGAN, WITHDRAWALS 200,000
MEDICAL REVENUES 434,000
SALARIES EXPENSE 73,000
REPAIR EXPENSE 23,000
ASSOCIATION DUES EXPENSE 15,000
TELEPHONE EXPENSE 3,000
TOTAL 2,423,000 2,423,000
POINT SYSTEM = 5 POINTS (MINUS 1 FOR EVERY ERROR)
ADJUSTING ENTRIES: 2 POINTS PER ENTRY (TOTAL = 14 POINTS)
ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT
A INSURANCE EXPENSE 1,666.67
PREPAID INSURANCE 1,666.67

B SUPPLIES EXPENE 35,000


MEDICAL SUPPLIES 35,000

C DEPRECIATION EXPENSE- MEDICAL BUILDING 5,000


ACUMULATED DEP’N- MEDICAL BUILDING 5,000

DEPERECIATION EXPENSE – MEDICAL EQUIPMENT 9,000


A CUMULATED DEP’N- MEDICAL EQUIOMENT 9,000

D UNEARNED REEARCH REVENUES 30,000


RESEARCH REVENUES 30,000

E SALARIES EXPENSE 51,000


SALARIES PAYABLE 51,000

F INTEREST EXPENSE 28,000


INTEREST PAYABLE 28,000

FINANCIAL STATEMENTS:
DR. NICK MARASIGAN, MD
INCOME TATEMENT
FOR THE PERIOD ENDED OCTOBER 2015
REVENUES
Medical Revenues P434,000
Research Revenues 30,000
Total P464,000

EXPENSES
Salaries Expense P124,000
Insurance Expense 1,667
Repair Expense 23,000
Supplies Expense 35,000
Association Dues Expense 15,000
Telephone Expense 3,000
Depreciation Expense- Medical BLDG 5,000
Depreciation Expense- Medical Eqpmt 9,000
Interest Expense 28,000
Total 243,667

Profit P220,333
DR. NICK MARASIGAN, MD
STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED OCTOBER 2015
MARASIGAN, CAPITAL, BEGINNING P250,000
ADD: PROFIT 220,333

BALANCE P470,333
LESS:MARASIGAN, WITHDRAWAL (200,000)

MARASIGAN, CAPITAL, ENDING P270,333

DR. NICK MARASIGAN, MD


BALANCE SHEET
FOR THE PERIOD ENDED OCTOBER 2015
ASSETS
CASH P114,000
ACCOUNT RECEIVABLE 204,000
MEDICAL SUPLLIES 21,000
PREPAID INSURANCE 18,333
TOTAL CURRENT ASSETS P357,333

LAND 250,000
MEDICAL BUILDING 1,000,000
LESS: ACUMULATED DEP’N- MEDICAL BLDG (5,000)
MEDICAL EQUIPMENT 465,000
LESS: ACUMULATED DEP’N- MEDICAL EQPMT (9,000)
TOTAL NON-CURRENT ASSETS 1,701,000

TOTAL ASSETS P2,058,333

LIABILITY AND EQUITY


LIABILTIY
24% NOTES PAYABLE P400,000
20% NOTES PAYABLE 1,200,000
ACCOUNTS PAYABLE 49,000
SALARIES PAYABLE 51,000
INTEREST PAYABLE 28,000
UNEARNED RESEARCH REVENUES 60,000
TOTAL LIABILITY P1,788,000

EQUITY
MARASIGAN, CAPITAL, ENDING 270,333

TOTAL LIABILITY AND EQUITY P2,058,333

POINT SYSTEM = 10 POINTS PER FS. MINUS 2 FOR EVERY MISSING/ERROR


CLOSING ENTRIES: (2 POINTS PER ENTRY)
ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT
1 MEDICAL REVENUES 434,000
RESEARCH REVENUES 30,000
INCOME SUMMARY 464,000

2 INCOME SUMMARY 243,667


Salaries Expense 124,000
Insurance Expense 1,667
Repair Expense 23,000
Supplies Expense 35,000
Association Dues Expense 15,000
Telephone Expense 3,000
Depreciation Expense- Medical BLDG 5,000
Depreciation Expense- Medical Eqpmt 9,000
Interest Expense 28,000

3 INCOME SUMMARY 220,333


MARASIGAN, CAPITAL 220,333

4 MARASIGAN, CAPITAL 200,000


MARASIGAN, WITHDRAWAL 200,000

POST- CLOSING TRIAL BALANCE (5 POINTS) MINUS 1 FOR EVERY ERROR

DR. NICK MARASIGAN, MD


POST-CLOSING TRIAL BALANCE
FOR THE PERIOD ENDED OCTOBER 2015
ACCOUNT TITLES DEBIT CREDIT
CASH 114,000
ACCOUNT RECEIVABLE 204,000
MEDICAL SUPLLIES 21,000
PREPAID INSURANCE 18,333
LAND 250,000
MEDICAL BUILDING 1,000,000
ACUMULATED DEP’N- MEDICAL BUILDING 5,000
MEDICAL EQUIPMENT 465,000
ACUMULATED DEP’N- MEDICAL EQUIPMENT 9,000
24% NOTES PAYABLE 400,000
20% NOTES PAYABLE 1,200,000
ACCOUNTS PAYABLE 49,000
SALARIES PAYABLE 51,000
INTEREST PAYABLE 28,000
UNEARNED RESEARCH REVENUES 60,000
MARASIGAN, CAPITAL 270,333
TOTAL 2,072,333 2,072,333
REVERSING ENTRIES: (2 POINT PER ENTRY)
ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT
1 SALARIES PAYABLE 51,000
SALARIES EXPENSE 51,000

2 INTEREST PAYABLE 28,000


INTEREST EXPENSE 28,000

Common questions

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The adjusting entry records the interest expense incurred but not paid, increasing the Interest Payable liability and recognizing the Interest Expense. In the subsequent period, a reversing entry negates the accrued Interest Payable against the Interest Expense, ensuring that the actual payment can be recorded without reflecting additional expenses, aligning cash and accrual methods .

Depreciation allocates the cost of tangible fixed assets over their useful life, reflecting usage and wear. On the financial statements, it reduces the carrying amount of the medical building and equipment by accumulating depreciation amounts, which is necessary for portraying the depletion of asset value resulting from operations during the period .

Marasigan's withdrawal of funds decreases the cash asset by 200,000 and is reflected as a reduction in the capital account, showing the distribution of earnings to the owner rather than an expense. This directly impacts the owner's equity but not the profit, thus maintaining an accurate account of the business's economic resources versus owner drawdowns .

Prepaid expenses are adjusted to represent the portion of the cost utilized during the period. This decreases the asset (Prepaid Insurance) and increases the expense on the income statement, ensuring cost alignment with the benefits consumed in the period. Such adjustments ensure accurate reflection of expenses incurred, maintaining compliant reporting and providing an accurate financial portrayal for future financial planning .

The unearned research revenues entry adjustment reallocates unearned revenue to revenue earned as the services are performed. In this case, unearthed research revenues of 30,000 are recognized as research revenue. This adjustment aligns revenue with the period in which it is earned, following the accrual basis of accounting and ensuring that the financial statements reflect the economic activity accurately .

Reversing entries streamline the accounting process by counteracting temporary year-end adjusting entries at the start of the next period, which simplifies the recording of transactions in the following period. For example, reversing entries for salaries payable and interest payable ensure that when the actual payment occurs, it is recorded correctly without causing duplicate expense recognition .

Recognizing income from unearned research revenues shifts a liability to recognized revenue as services are completed, impacting both the income statement and balance sheet. This adjustment ensures revenues are matched with the period in which services are rendered, consequently increasing total profits reported and reducing future liabilities .

Reporting both accumulated depreciation and original cost provides a clear picture of the asset's book value and its usage over time. The original cost provides the initial value of the asset, while accumulated depreciation shows how much of the asset's value has been allocated to depreciation expenses, which helps users understand the remaining useful life and current valuation of the asset .

The impact of the adjusting entry for prepaid insurance, which is a debit to Insurance Expense and a credit to Prepaid Insurance of 1,666.67, decreases the Prepaid Insurance asset on the balance sheet by 1,666.67, and increases the Insurance Expense on the income statement by the same amount .

The closing process involves closing income and expense accounts to the Income Summary, and then transferring the net income (profit) to the Marasigan, Capital account. This results in an increase in the Marasigan, Capital account by 220,333, which reflects the addition of the profit generated for the period. Subsequently, the withdrawal of 200,000 is deducted, resulting in a net increase of the capital account .

DATE ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT Oct 1 Cash 250,000 Marasigan, Capital 250,00
T- ACCOUNT: (1 POINT PER ACCOUNT) TOTAL = 18 POINTS ENDING BALANCES CASH = 114,000 DR ACCOUNT RECEIVABLE = 204,000 DR
ADJUSTING ENTRIES: 2 POINTS PER ENTRY (TOTAL = 14 POINTS) ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT A INSURANCE EXP
DR. NICK MARASIGAN, MD STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED OCTOBER 2015 MARASIGAN, CAPITAL, BEGINNING
CLOSING ENTRIES: (2 POINTS PER ENTRY) ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT 1 MEDICAL REVENUES 434,000
REVERSING ENTRIES: (2 POINT PER ENTRY) ACCOUNT TITLES AND EXPLANATIONS DEBIT CREDIT 1 SALARIES PAYABLE 51,000

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