Financial Transactions and Effects of Economic Transactions

Question

Assume that a group of physicians provided $500,000 in cash as start-up capital to initiate a community-based primary care clinic, Healthy Neighbor, Inc. in July 2003.

2. The clinic received $300,000 in unrestricted contributions from a community philanthropist

3. Office and medical equipment was purchased for $175,355 in cash.

4. Medical supplies costing $95,500 were purchased on account.

5. Current month’s lease of $3,500, $1,520 in utilities, and $6,500 (of the $10,000) in staff salaries were paid in cash.

6. Healthy Neighbor provided health care services charged to patients’ accounts of $155,650 during July.

7. Reimbursement of $23,425 for patient services received in cash on July 31.

8. $18,645 of medical supplies were used to provide patient care.

9. Equipment depreciated $5,000.

10. Anticipating additional cash outlays for new staff, Healthy Neighbor signed a special promissory note with a bank for $10,500 at zero interest.

Required:

i. Using T-accounts translate the following set of financial transactions into accounting entries for the first month of operations for HNI and show end-of-month account balances.

ii. show and explain the effects of economic transactions.

Summary: This question belongs to accounting and discusses about transaction accounts and explains the effects of economic transactions.

Answer is in Excel format