Steps 3, 5, & 8 Posting to the T-Accounts (General Ledger)

Steps 3, 5, & 8 – Posting to the T-Accounts (General Ledger)

+ Cash (A)  / Accounts
+ Receivable (A)  / + Supplies (A) 
Bal. 7 / b 25 / Bal. 3 / g 9 / Bal. 3
a 22 / e 25 / d 8 / i 7
c 5 / f 3 / 10
d 47 / h 10 / l 7
g 9 / k 2
j 3
Bal. 28 / Bal. 2 / Bal. 3
+ Equipment (A)  / Accumulated
Depreciation (xA) + / + Other Assets (A) 
Bal. 6 / Bal. 1 / Bal. 6
b 25 / m 4 / f 3
Bal. 31 / Bal. 5 / Bal. 9
Accounts
Payable (L) + /  Notes Payable (L) + /  Wages Payable (L) +
h 10 / Bal. 5 / a 22 / o 3
e 5
i 7
Bal. 7 / Bal. 22 / Bal. 3
 Interest Payable (L) + / Income Taxes
Payable (L) + / Unearned
 Revenue (L) +
n 4 / p 1 / j 3
Bal. 4 / Bal. 1 / Bal. 3
+Dividends (SE)  / Common
 Stock (SE) + / Retained
 Earnings (SE) +
k 2 / Bal. 15 / Bal. 4
CE4 2 / c 5 / CE4 2 / CE3 6
Bal. 0 / Bal. 20 / Bal. 8
Income
 Summary (SE) + /  Service Revenue (R) + / Income Tax +Expense (E) 
CE2 49 / CE1 55 / d 55 / p 1
CE3 6 / Bal. 6 / CE1 55 / CE2 1
Bal. 0 / Bal. 0 / Bal. 0
Interest
+Expense (E)  / Depreciation
+Expense (E)  / Operating +Expenses (E) 
n 4 / m 4 / e 30
CE2 4 / CE2 4 / l 7
o 3 / CE2 40
Bal. 0 / Bal. 0 / Bal. 0

Steps 1 & 2 – Analyze & Journalize

a. / Cash / 22
Note Payable / 22
b. / Equipment / 25
Cash / 25
c. / Cash / 5
Common Stock / 5
d. / Cash / 47
Accounts Receivable / 8
Service Revenue / 55
e. / Operating Expenses / 30
Accounts Payable / 5
Cash / 25
f. / Other Assets / 3
Cash / 3
g. / Cash / 9
Accounts Receivable / 9
h. / Accounts Payable / 10
Cash / 10
i. / Supplies / 7
Accounts Payable / 7
j. / Cash / 3
Unearned Revenue / 3
k. / Dividends / 2
Cash / 2

Step 4 – Trial Balance

Northland Physical Therapy

Trial Balance

At December 31, 2016

(in thousands)

Account Titles / Debit / Credit
Cash / $ 28
Accounts Receivable / 2
Supplies / 10
Equipment / 31
Accumulated Depreciation - Equipment / $ 1
Other Assets / 9
Accounts Payable / 7
Notes Payable / 22
Wages Payable / 0
Interest Payable / 0
Income Taxes Payable / 0
Unearned Revenue / 3
Common Stock / 20
Retained Earnings / 4
Dividends / 2
Service Revenue / 55
Depreciation Expense - Equipment / 0
Income Tax Expense / 0
Interest Expense / 0
Operating Expenses / 30
Totals / $ 112 / $ 112

Step 5 – Adjusting Entries

l. / Supplies Expense / 7
Supplies / 7
m. /

Depreciation Expense - Equipment

/ 4

Accumulated Depreciation - Equipment

/ 4
n. /

Interest Expense

/ 4
Interest Payable / 4
o. / Salaries Expense / 3
Salaries Payable / 3
p. / Income Tax Expense / 1
Income Taxes Payable / 1

Step 6 – Adjusted Trial Balance

Northland Physical Therapy

Adjusted Trial Balance

At December 31, 2016

(in thousands)

Account Titles / Debit / Credit
Cash / $ 28
Accounts Receivable / 2
Supplies / 3
Equipment / 31
Accumulated Depreciation - Equipment / $ 5
Other Assets / 9
Accounts Payable / 7
Notes Payable / 22
Wages Payable / 3
Interest Payable / 4
Income Taxes Payable / 1
Unearned Revenue / 3
Common Stock / 20
Retained Earnings / 4
Dividends / 2
Service Revenue / 55
Depreciation Expense - Equipment / 4
Income Tax Expense / 1
Interest Expense / 4
Operating Expenses / 40
Totals / $ 124 / $ 124

Step 7 – Financial Statements

Northland Physical Therapy

Income Statement

For the Year Ended December 31, 2016

(in thousands)

Revenues:
Service Revenue / $ 55
Expenses:
Operating Expenses / (40)
Depreciation Expense – Equipment / (4)
Interest Expense / (4)
Income Tax Expense / (1)
Total Expenses / (49)
Net Income / $ 6

Northland Physical Therapy

Statement of Retained Earnings

For the Year Ended December 31, 2016

(in thousands)

Retained Earnings, January 1, 2016 / $ 4
Add: Net Income / 6
Subtract: Dividends / (2)
Retained Earnings, December 31, 2016 / $ 8

Northland Physical Therapy

Balance Sheet

At December 31, 2016

(in thousands)

Assets: / Liabilities:
Current Assets: / Current Liabilities:
Cash / $ 28 / Accounts Payable / $ 7
Accounts Receivable / 2 / Notes Payable / 22
Supplies / 3 / Wages Payable / 3
Total Current Assets / 33 / Interest Payable / 4
Income Taxes Payable / 1
Equipment / $ 31 / Unearned Revenue / 3
Less: Accum. Depr. – Eq. / (5) / 26 / Total Current Liabilities / 40
Other Assets / 9 / Stockholders' Equity:
Common Stock / 20
Retained Earnings / 8
Total Stockholders' Equity / 28
Total Assets / $ 68 / Total Liabilities and Stockholders' Equity / $ 68

Step 8 – Closing Entries

1 / Service Revenue / 55
Income Summary / 55
2 / Income Summary / 49
Depreciation Expense - Equipment / 4
Income Tax Expense / 1
Interest Expense / 4
Operating Expenses / 40
3 / Income Summary / 6
Retained Earnings / 6
4 / Retained Earnings / 2
Dividends / 2

Step 9 – Post-Closing Trial Balance

Northland Physical Therapy

Post-Closing Trial Balance

At December 31, 2016

(in thousands)

4-1