Gon, upon completing a residency program at Harvard Medical Center, established a medical practice in Batangas City.

During April 2017, the first month of operations, the following transactions occured:

Month of April 2017

April 1 Dr. Lerman transferred Php 250,000 from his personal checking amount to a bank
account, Dr. Logan Lerman, M.D.
1 A medical clinic, Php 1,000,000 and land, Php 250,000 were acquired by paying Php
50,000 in cash and issuing a 5-year, 20% note payable (interest is payable every 6
months) for the Php 1,200,000.
1 Acquired a medical equipment costing Php 420,000 and medical supplies amounting to
Php 39,000, by paying Php 59,000 cash and issuing a 24% note payable, maturing in 6
months, for the Php 400,000 balance.
2 Acquired “all-in-one” insurance for a year, Php 20,000.
4 Received cash from patients amounting to Php 117,000.
7 Bought medical supplies on account from Batangas City Supply, Php 17,000.
10 Paid salaries of nurses and office staff, Php 73,000.
12 Received Php 90,000 from the Batangas Experimental Drug center for research to be
conducted by Dr. Lerman over the next 3 months.
18 Billed patients Pghp 317,000 for services rendered.
21 Paid Php 23,000 for repairs to the medical equipment.
23 Paid the telephone bill, Php 3,000.
24 Bought medical equipment on account from Dr. De Leon, Php 45,000.
25 Collected Php 113,000 from patients billed on the 18th.
27 Paid Php 13,000 on account from Batangas City Supply.
30 Withdrew Php 200,000 in cash from the medical practice.
30 Paid Php 15,000 dues to the Batangas Medical Association.

Required:

1. Use the following account titles in establishing a journal entries.

Account No. Account No.

ASSETS OWNER’S EQUITY
Cash 110 Lerman, Capital 310
Accounts Receivable 120 Lerman, Withdrawals 320
Medical Supplies 130 Income Summary 330
Prepaid Insurance 140 INCOME
Land 150 Medical Revenues 410
Medical Building 160 Research Revenues 420
Accumulated Depreciation- Medical Building 165 EXPENSES
Medical Equipment 170 Salaries Expense 510
Accumulated Depreciation- Medical Equipment 175 Insurance Expense 520
LIABILITIES Repairs Expense 530
24% Note Payable 210 Supplies Expense 540
20% Note Payable 220 Association Dues Expense 550
Accounts Payable 230 Telephone Expense 560
Salaries Payable 240 Depreciation Expense-Bldg. 570
Interest Payable 250 Depreciation Expense-Equipt. 580
Unearned Research Revenues 260 Interest Expense 590

2. Record and journalize the transactions for the month of April. Establish a T-Accounts to record those transactions
that will later require adjustments. Prepare a trial balance for the transactions (46 pts.)
.
3. Record the following adjustments. (24 pts)

a. Insurance for one month has expired.

b. Medical supplies on hand at the month-end amounted to Php 21,000.
c. Depreciation on the medical building and on the medical equipment is Php 5,000 and Php 9,000 respectively.
d. Unearned research revenues in the amount of Php 30,000 have been earned.
e. Salaries of Php 51,000 have accrued.
f. Interest on the 20% and 24% notes are Php 20,000 and Php 8,000, respectively.