End-Of-Period Adjustments
West Laboratory Adjusts and Closes Its Accounts at the End

question 3

Essay

End-of-period adjustments
West Laboratory adjusts and closes its accounts at the end of each month. The trial balance at September 30, 2010, before adjustments, is as follows:
The following information relates to month end adjustments:
(a) Office supplies on hand September 30 amounted to $500.
(b) The useful life of the medical equipment was estimated to be 20 years with no residual
value.
(c) Many patients pay in advance for major medical procedures. Fees of $6,000 were earned during the month by performing procedures on patients who had paid in advance.
(d) Salaries earned by employees during the month but not yet recorded amounted to $2,300.
(e) On September 1, West Laboratory had moved and paid 2 month's rent in advance.
(f) Medical procedures performed during the month but not yet billed or recorded amounted to $4,600.
Prepare the adjusting entries required at September 30.
$$\begin{array} { | l | r | r | } \hline & { \text { Debit } } & { \text { Credit } } \\\hline \text { Cash } & \$ 18,200 & \\\hline \text { Medical Fees Receivable } & 27,000 & \\\hline \text { Prepaid Rent } & 5,000 & \\\hline \text { Office Supplies } & 1,200 & \\\hline \text { Medical Equipment } & 21,800 & \\\hline \text { Accumulated Depreciation: Medical Equipment } & & \$ 6,000 \\\hline \text { Accounts Payable } & & 3,000 \\\hline \text { Notes Payable } & & 8,000 \\\hline \text { Unearned Medical Fees } & & 14,000 \\\hline \text { Capital Stock } & & 18,000 \\\hline \text { Retained Earnings } & & 16,000 \\\hline \text { Dividends } & 1,000 & \\\hline \text { Medical Fees Earned } & & 31,000 \\\hline \text { Salaries Expense } & 14,000 & \\\hline \text { Utilities Expense } & 2,000 & \\\hline \text { Insurance Expense } & 5,800 & \\\hline & \underline { \$ 96,000 } & \underline { \underline { \$ 96,000 } } \\\hline & & \\\hline\end{array}$$ $$\begin{array} { | c | c | c | c | } \hline \text { Date } & \text { Account } & \text { Debit } & \text { Credit } \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline & & & \\\hline\end{array}$$

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