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

question 68

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:
$\begin{array}{lr}&\text { Debit } & \text { Credit }\\\text { Cash } & \$ 18,200 \\\text { Medical Fees Receivable } & 27,000 \\\text { Prepaid Rent } & 5,000 \\\text { Office Supplies } & 1,200 \\\text { Medical Equipment } & 21,800\\\text { Accumulated Depreciation: Medical Equipment } && \$ 6,000 \\\text { Accounts Payable } && 3,000 \\\text { Notes Payable } & &8,000 \\\text { Unearned Medical Fees } & &14,000 \\\text { Share Capital } & &18,000 \\\text { Retained Earnings } & &16,000\\\text { Dividends } & 1,000 \\\text { Medical Fees Earned } &&31,000 \\\text { Salaries Expense } & 14,000 \\\text { Utilities Expense } & 2,000 \\\text { Insurance Expense } & 5,800 \\&\$ 96,000&\$ 96,000\end{array}$
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.

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