Problem #1

On October 1, 2023, Samuel Barbo, a recent medical board topnotcher, started his medical practice. During the m
the following transactions were completed:

Oct. 1 Barbo invested P42,500 pesonal funds in a new bank account in the name of Samuel Barbo, MD
2 Acquired medical equipment costing P95,000 from Tambilo Medical Equipment Company,
paying P15,000 cash, and financing the remainder by issuing a P80,000 notes payable
3 Paid rent for the month of October, P7,500
5 Acquired medical supplies from Suiza Medical Supply Company on account, P15,250
7 Received P18,450 in cash from patients for medical services rendered this week
9 Paid Pablo Labs for preparing laboratory work on a patient, P1,800
12 Paid salaries of medical technician and receptionist, P9,600
15 Billed patients P51,700 for services rendered
17 Paid Suiza Medical Supply Company P3,750 on account
20 Paid telephone expense, P850
21 Paid miscellaneous expense, P1,150
22 Received P27,500 from patients billed on Oct. 15
23 Acquired additional medical supplies from Suiza Medical Supply Company on account, P9,100
25 Paid salaries , P11,200
26 Billed patients P40,150 for services rendered
27 Paid Suiza Medical Supply Company, P6,150 on account
28 Withdrew P15,000 from the medical practice
cal practice. During the month,

of Samuel Barbo, MD
ment Company,
tes payable

on account, P9,100
SOLUTION

Initial Investment (Source of Assets)

Oct 1 Barbo invested P42,500 pesonal funds in a new bank account in the name of Samuel Barbo, MD

Transaction Analysis Assets increased. Owner's Equity increased

Rules Increases in assets are recorded by debits.

Increases in owner's equity are recorded by credits.

Entry Increase in assets is recorded by a debit to Cash

Increase in owner's equity is recorded by a credit to Barbo, Capital

Dr. Cr.
Journal Entry Cash (A) 42,500
Barbo, Capital 42,500

Medical Equipment Acquired on Account (Exchange and Source of Assets)

Oct 2 Acquired medical equipment costing P95,000 from Tambilo Medical Equipment Company,
paying P15,000 cash, and financing the remainder by issuing a P80,000 notes payable

Transaction Analysis Assets increased. Assets decreased. Liabilities increased.

Rules Increase in assets are recorded by debits.

Decreases in assets are recorded by credits.
Increases in liabilities are recorded by credits.

Entry Increase in asset is recorded by a debit to Medical Equipment

Decreases in assets is recorded by a credit to Cash.
Increase in liabilities is recorded by a credit to Notes Payable.
 Dr. Cr.
Journal Entry Medical Equipment (A) 95,000
Cash (A) 15,000
Notes Payable (L) 80,000

Expenses Incurred and Paid (Use of Assets)

Note: Increases in Expense are considered Decreases in
Oct 3 Paid rent for the month of October, P7,500

Transaction Analysis Assets decreased. Owner's Equity Decreased

Rules Decreases in assets are recorded by credits.

Decreases in owner's equity are recorded by debits.

Entry Decrease in owner's equity is recorded by a debit to Rent Expense.

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Rent Expense ( E ) 7,500
Cash (A) 7,500

Supplies Purchased on Account (Source of Assets)

Oct 5 Acquired medical supplies from Suiza Medical Supply Company on account, P15,250

Transaction Analysis Assets increased. Liabilities increased.

Rules Increase in assets are recorded by debits.

Increases in liabilities are recorded by credits.
 Entry Increase in assets are recorded by a debit to Medical Supplies
Increase in liabilities is recorded by a credit to Accounts Payable.

Dr. Cr.
Journal Entry Medical Supplies (A) 15,250
Accounts Payable (L) 15,250

Revenues Earned and Cash Collected (Source of Assets)

Note: Increases in Income are considered Increases in th
Oct 7 Received P18,450 in cash from patients for medical services rendered this week

Transaction Analysis Assets increased. Owner's Equity increased thru Income.

Rules Increases in assets are recorded by debits.

Increases in owner's equity are recorded by credits.

Entry Increase in assets is recorded by a debit to Cash.

Increase in owner's equity is recorded by a credit to Medical Revenues

Dr. Cr.
Journal Entry Cash (A) 18,450
Medical Revenues (I) 18,450

Expenses Incurred and Paid (Use of Assets)

Note: Increases in Expense are considered D
Oct 9 Paid Pablo Labs for preparing laboratory work on a patient, P1,800

Transaction Analysis Assets decreased. Owner's equity decreased.

Rules Decreases in assets are recorded by credits.

 Decreases in owner's equity are recorded by debits.

Entry Decrease in owner's equity is recorded by a debit to Laboratory Expense.

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Laboratory Expense ( E ) 1,800
Cash (A) 1,800

Salaries Paid (Use of Assets)

Oct 12 Paid salaries of medical technician and receptionist, P9,600

Transaction Analysis Assets decreased. Owner's equity decreased.

Rules Decreases in assets are recorded by credits.

Decreases in owner's equity are recorded by debits.

Entry Decrease in owner's equity is recorded by a debit to Salaries Expense.

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Salaries Expense ( E ) 9,600
Cash (A) 9,600

Revenues Earned on Account (Source of Assets)

Oct 15 Billed patients P51,700 for services rendered

 Transaction Analysis Assets increased. Owner's equity increased.

Rules Increases in assets are recorded by debits.

Increases in owner's equity are recorded by credits.

Entry Increase in assets is recorded by a debit to Accounts Receivable

Increase in owner's equity is recorded by a credit to Medical Revenues

Dr. Cr.
Journal Entry Accounts Receivable (A) 51,700
Medical Revenues (I) 51,700

Accounts Payable Partially Settled (Use of Assets)

Oct 17 Paid Suiza Medical Supply Company P3,750 on account.

Transaction Analysis Assets decreased. Liabilities decreased.

Rules Decreases in assets are recorded by credits.

Decreases in liabilities are recorded by debits.

Entry Decrease in liabilities is recorded by a debit to Accounts Payable

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Accounts Payable (L) 3,750
Cash (A) 3,750

Expenses Incurred and Paid (Use of Assets)

 Oct 20 Paid telephone expense, P850

Transaction Analysis Assets decreased. Owner's equity decreased.

Rules Decreases in assets are recorded by credits.

Decreases in owner's equity are recorded by debits.

Entry Decrease in owner's equity is recorded by a debit to Telephone Expense.

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Telephone Expense ( E ) 850
Cash (A) 850

Expenses Incurred and Paid (Use of Assets)

Oct 21 Paid miscellaneous expense, P1,150

Transaction Analysis Assets decreased. Owner's equity decreased.

Rules Decreases in assets are recorded by credits.

Decreases in owner's equity are recorded by debits.

Entry Decrease in owner's equity is recorded by a debit to Miscellaneous Expense.

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Miscellaneous Expense ( E ) 1,150
Cash (A) 1,150
Accounts Receivable Partially Collected (Exchange of Assets

Oct 22 Received P27,500 from patients billed on Oct. 15

Transaction Analysis An asset increased. Another asset decreased.

Rules Increases in assets are recorded by debits.

Decreases as credits.

Entry Increase in assets is recorded by a debit to Cash

Decrease in assets is recorded by a credit to Accounts Receivable.

Dr. Cr.
Journal Entry Cash (A) 27,500
Accounts Receivable (A) 27,500

Supplies Purchased on Account (Source of Assets)

Oct 23 Acquired additional medical supplies from Suiza Medical Supply Company on account, P9,100

Transaction Analysis Assets increased. Liabilities increased.

Rules Increase in assets are recorded by debits.

Increases in liabilities are recorded by credits.

Entry Increase in assets are recorded by a debit to Medical Supplies

Increase in liabilities is recorded by a credit to Accounts Payable.

Dr. Cr.
Journal Entry Medical Supplies (A) 9,100
Accounts Payable (L) 9,100
Salaries Paid (Use of Assets)

Oct 25 Paid salaries , P11,200

Transaction Analysis Assets decreased. Owner's equity decreased.

Rules Decreases in assets are recorded by credits.

Decreases in owner's equity are recorded by debits.

Entry Decrease in owner's equity is recorded by a debit to Salaries Expense.

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Salaries Expense ( E ) 11,200
Cash (A) 11,200

Revenues Earned on Account (Source of Assets)

Oct 26 Billed patients P40,150 for services rendered

Transaction Analysis Assets increased. Owner's equity increased.

Rules Increases in assets are recorded by debits.

Increases in owner's equity are recorded by credits.

Entry Increase in assets is recorded by a debit to Accounts Receivable

Increase in owner's equity is recorded by a credit to Medical Revenues

Dr. Cr.
 Journal Entry Accounts Receivable (A) 40,150
Medical Revenues (I) 40,150

Accounts Payable Partially Settled (Use of Assets)

Oct 27 Paid Suiza Medical Supply Company, P6,150 on account

Transaction Analysis Assets decreased. Liabilities decreased.

Rules Decreases in assets are recorded by credits.

Decreases in liabilities are recorded by debits.

Entry Decrease in liabilities is recorded by a debit to Accounts Payable

Decrease in assets is recorded by a credit to Cash.

Dr. Cr.
Journal Entry Accounts Payable (L) 6,150
Cash (A) 6,150

Drawings/Withdrawal of Cash by Owner (Use of Assets)

Oct 28 Withdrew P15,000 from the medical practice

Transaction Analysis Assets decreased. Owner's equity decreased.

Rules Decreases in assets are recorded by credits.

Decreases in owner's equity are recorded by debits.

Entry Decrease in owner's equity is recorded by a debit to Barbo, Drawings

Decrease in assets is recorded by a credit to cash.
 Dr. Cr.
Journal Entry Barbo, Drawings (OE) 15,000
Cash (A) 15,000
dered Decreases in the Owner's Equity
ered Increases in the Owner's Equity

se are considered Decreases in the Owner's Equity