Overview- Recording and Reporting financial information
You have learned about the financial statements but how do financial transactions get recorded and reported? The goal of this module is to take you through the creation of a journal entry, the posting of the journal entry to the ledger then the transfer of the ledger balances to the financial statements.
This is an individual assignment. To complete this assignment, there is an excel spreadsheet in the Module as your guide. Included in this module are a series of 20 financial transactions.
a. You are to record these financial transactions as journal entries on the left hand side of the spreadsheet. Please include the amount that is debited and the amount that is credited. Note that the proper method to record the credit is a slight indentation from the dr account.
b. In addition, please indicate if the account is located on the Income Statement (IS) or the Balance Sheet (BS). There is a column titled IS/ BS for this entry.
c. Additionally, indicate if the account is an asset (A), liability (L), Net asset (NA), revenue (R) or Expense (E) account. There is a column titled A/L/NA/R/E for this.
d. There should be a total at the end of the journal entries- make sure your debits = your credit balances.
Transactions to record for the month of January:
1- Salaries of $2,000,000 are accrued.
2- Salaries of $2,000,000 are paid in cash.
3- A CAT scan is purchased with a loan payable for $3,000,000.
4- Medical supplies are purchased for $500,000 on account (this means accounts payable- to be paid off at a later date).
5- $ 250,000 of medical supplies are used are should be expensed. Remember the matching principle- expense not recorded on purchase but when used.
6- $50,000 of administrative supplies are purchased and placed into inventory.
7- A utility bill of $25,000 is received.
8- Last month's utility bill of $15,000 is paid in cash. The liability was accrued last month.
9- Employee benefits of $350,000 are paid in cash.
10- Patient billings, net of contractual allowances and charity care, are accrued for the month in the amount of $5,000,000.
11- $275,000 of prior accounts receivable are deemed uncollectible or bad debts.
12- Cafeteria revenue is recorded for the month of $20,000. This revenue is recorded as Other Revenue and is received in cash.
13- $5,000 of administrative expenses are used in the month of January.
14- A donation of $500,000 is received. The donation is restricted in its use.
15- An insurance policy for $12,000 is purchased in the month of January and paid for in full. It covers the months of January - December.
16- Record the insurance expense for the month of January related to #15- one month= $1,000.
17- Interest expense for the CAT scan loan is accrued for the year at $24,000.
18- Interest expense on the loan is paid for January in the amount of $2,000.
19- Medical supplies are purchased for $30,000 and placed in inventory.
20- Depreciation is recorded for the month for the PPE of $285,000.
Attachment:- Assignment Files.rar