COMPREHENSIVE WORD PROBLEM 2

Dr. John Carlos, upon completing a residency program at Harvard Medical Center, established a
medical practice in San Pablo, Laguna. During October 2020, the first month of operations, the following
transactions occurred:

Oct. 01 Dr. John Carlos transferred P250,000 from his personal checking account to a bank
account, Dr. John Carlos, M.D.
01 A medical clinic, P1,000,000 and land P250,000 were acquired by paying P50,000 in cash
and issuing a 5-year, 20% note payable (interest is payable every 6 months) for the
P1,200,000 balance.
01 Acquired medical equipment costing P420,000 and medical supplies amounting to
P39,000 by paying P59,000 cash and issuing a 24% note payable, maturing in 6 months,
for the P400,000 balance.
02 Acquired “all-in-one” insurance for a year P20,000.
04 Received cash from patients amounting to P117,000.
07 Bought medical supplies on account from San Pablo Supply, P17,000.
10 Paid salaries of nurses and office staff, P73,000.
12 Received P90,000 from the Laguna Experimental Drug Center for research to be
conducted by Dr. John Carlos over the next 3 months.
18 Billed patients P317,000 for services rendered.
21 Paid P23,000 for repairs to the medical equipment.
23 Paid telephone bill, P3,000.
24 Bought medical equipment on account from Dr. De Leon, P45,000.
25 Collected P113,000 from patients billed on the 18th.
27 Paid 13,000 on account to San Pablo Supply.
30 Withdrew P200,000 cash from the medical practice.
30 Paid P15,000 dues to the Laguna Medical Association.

REQUIRED:

1. Record the transactions for the month of October in a journal (page 1).
2. Post the entries to the ledger using the following accounts and account numbers:

Account No. Account No.

Cash 110 John Carlos, Capital 310
Accounts Receivable 120 John Carlos, Withdrawals 320
Medical Supplies 130 Income Summary 330
Prepaid Insurance 140 Medical Revenues 410
Land 150 Research Revenues 420
Medical Building 160 Salaries Expense 510
Accumulated Depreciation- Medical Insurance Expense 520
Building 165 Repairs Expense 530
Medical Equipment 170 Supplies Expense 540
 Accumulated Depreciation – Medical Association Due Expense 550
Equipment 175 Telephone Expense 560
24% Note Payable 210 Depreciation Expense- Building 570
20% Note Payable 220 Depreciation Expense-Equipt. 580
Accounts Payable 230 Interest Expense 590
Salaries Payable 240
Interest Payable 250
Unearned Research Revenue 260

3. Prepare a Trial Balance.

4. Prepare and complete the 10-column worksheet using the following information:
a. Insurance for one month has expired.
b. Medical supplies on hand at month-end amounted to P21,000.
c. Depreciation on the medical building and on the medical equipment is P5,000 and P9,000
respectively.
d. Unearned research revenues in the amount of P30,000 have been earned.
e. Salaries of P51,000 have accrued.
f. Interest on the 20% and 24% notes are P20,000 and P8,000 , respectively.

5. Prepare the following financial Statements:

a. Income Statement
b. Statement of Changes in Equity
c. Balance Sheet
d. Statement of Cash Flows.
6. Record the adjusting and closing entries in the journal (page 2) and post the entries to the
ledger.
7. Prepare a post-closing trial balance.
8. Prepare the salaries and interest reversing entries in the journal (page 3) and post them to the
ledger.

9.