Kettle Creek Dental Corp. was incorporated on 1 March and applies ASPE. During March: (1) shares issued for 60,000 cash; (2) equipment bought for 35,000 — 15,000 cash and a 20,000 note payable; (3) supplies bought for 2,600 on account; (4) services billed of 14,800, of which 9,000 was collected in cash and 5,800 remains receivable; (5) rent of 3,000 paid; (6) 1,000 of the supplies payable paid; (7) a 2,000 deposit received from a patient for orthodontic work to be done in April; (8) a 1,500 dividend declared and paid. Also on 28 March the practice signed a lease for a second treatment room starting in June; nothing has been paid. Complete the five totals at 31 March.

Answer

Cash → 50500 · Total assets → 93900 · Total liabilities → 23600 · Retained earnings → 10300 · Total liabilities and equity → 93900

Cells - Cash · ±0 - Total assets · ±0 - Total liabilities · ±0 - Retained earnings · ±0 - Total liabilities and equity · ±0 Cash = 60,000 − 15,000 + 9,000 − 3,000 − 1,000 + 2,000 − 1,500 = **50,500**. Total assets = cash 50,500 + accounts receivable 5,800 + supplies 2,600 + equipment 35,000 = **93,900**. Total liabilities = note payable 20,000 + accounts payable (2,600 − 1,000) 1,600 + unearned revenue 2,000 = **23,600**. Retained earnings = revenue 14,800 − rent 3,000 − dividend 1,500 = **10,300** (the 5,800 not yet collected is still revenue earned; the 2,000 deposit is not). Total liabilities and equity = 23,600 + 60,000 + 10,300 = **93,900** — the proof. The lease signed on 28 March is not an exchange and has no row.

Hermanson Vol 1 ch 1 (start-up equation table, adapted shape); Dauderis & Annand §1.5 (concept map B3)