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name Izabela
Izabela Jach opened a medical office under the name Izabela Jach, MD, on August 1, 2017. On
August 31, the balance sheet showed Cash $3,000; Accounts Receivable $1,500;
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under-the-name-izabela
Izabela Jach opened a medical office under the name Izabela Jach, MD, on August 1, 2017. On
August 31, the balance sheet showed Cash $3,000; Accounts Receivable $1,500; Supplies
$600; Equipment $7,500; Accounts Payable $5,500; Note Payable $3,000; and I. Jach, Capital,
$4,100. During September, the following transactions occurred:
5 Provided services of $10,500, of which $7,700 was collected from patients and the remainder
was on account.
12 Purchased additional equipment for $2,300, paying $800 cash and leaving the balance on
account.
15 Paid salaries, $2,800; rent for August, $1,900; and advertising expenses, $275.
28 Signed a contract to provide medical services, not covered under the government health
plan, to employees of CRS Corp. in October for $5,700. CRS Corp. will pay the amount owing
after the medical services have been provided.
Instructions
(a) Beginning with the August 31 balances, prepare a tabular analysis of the effects of the
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September transactions on the accounting equation.
(b) Prepare an income statement and statement of owner's equity for September, and a balance
sheet at September 30.
TAKING IT FURTHER
What are the differences between purchasing an item on account and signing a note payable
for the amount owing?
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