Response to the following:
Using the income statement and statement of cash flows you prepared in Exercise, reconcile net income with the net cash flows from operations.
Exercise :
Using the data from Exercises 1 and 2, prepare financial statements for July, including income statement, retained earnings statement, balance sheet, and statement of cash flows.
Exercises 2
Using the data from Exercise 1, record the adjusting entries at the end of July to record the insurance expense and supplies expense. There were $280 of supplies on hand as of July 31. Identify the adjusting entry for insurance as (a1) and supplies as (a2).
Exercise 1
Chico Urgent Care is owned and operated by Dr. Janet Scanlon, the sole stockholder. During July 2007, Chico Urgent Care entered into the following transactions:
a. Dr. Scanlon invested $10,000 in Chico Urgent Care in exchange for capital stock.
b. Paid $3,600 for an insurance premium on a one-year policy.
c. Purchased supplies on account, $500.
d. Received fees of $18,650 during July.
e. Paid expenses as follows: wages, $5,240; rent, $2,500; utilities, $1,100; and miscellaneous, $880.
f. Paid dividends of $1,000.
Record the preceding transactions using the integrated financial statement framework. After each transaction, you should enter a balance for each item.