Question

Andy Wright,D.D.S., opened a dental practice on January 1, 2020. Andy prepares his financial statements monthly. During the first month of operations the following transactions occurred.

Instructions

Using the Excel template for question number 23 that you downloaded prior to starting this exam, prepare the adjusting entries on January 31. When finished answering this question, upload your completed worksheet containing your answer. Account titles are:

Accumulated depreciation-equipment	Depreciation expense
Service revenue	Accounts receivable
Insurance expense	Interest expense
Interest payable	Prepaid insurance
Supplies	Supplies expense
Utilities expense	Utilities payable

1. Performed services for patients. At January 31, $1,280 of such services was earned but not yet recorded.
2. Utility expenses incurred but not paid or recorded prior to January 31 totaled $365.
3. Depreciation on dental equipment purchased during the month is estimated to be $500 for the month.
4. Purchased a one-year malpractice insurance policy during the month for $9,600. One month has expired.
5. Purchased $2,300 of dental supplies during the month. On January 31, determined that $700 of supplies had been used.

Answer 1

Following are the adjusted entries as required -

BOOKS OF ANDY WRIGHT (D.D.S)

JOURNAL ENTRIES FOR JANUARY 2020

Date	Particulars	Debit ($)	Credit ($)
31/01/2020	Accounts receivable	1,280
	Service Revenue		1,280
31/01/2020	Utlities expense	365
	Utlities payable		365
31/01/2020	Depreciation expense	500
	Accumulated depreciation - equipment		500
31/01/2020	Insurance expense (9,600 / 12)	800
	Prepaid Insurance		800
31/01/2020	Supplies Expense	700
	Supplies		700