Sally Golfo, a registered nurse, opens a business called Sally,s Elder Care. Golfo plans to care for the elderly herself in a facility that she will rent. The following transactions occurred during July 2013, her first month in business. Analyze these transactions on a work sheet similar to that illustrated in the text. You will need columns for Cash, Accounts receivable, Prepaid rent, Furniture, Notes payable, Accounts payable, and Sally Golfo, Capital.
1 Ms. Golfo invested $ 5,000 of her own money to start the business.
1 She borrowed $ 20,000 from the bank to provide her with additional cash. She agreed to repay the bank $ 1,000 on the last day of every month, starting July 31, with interest at the rate of 6 percent a year on the unpaid balance.
1 She rented the house next to hers for a 3 month period, paying a total of $ 6,000, to provide a facility to care for her patients.
1 She purchased furniture for the facility. She received an invoice for $ 4,800, payable in 10 days.
10 She paid the $ 4,800 invoice for the furniture.
18 She paid her assistant $ 800 for 2 weeks work.
20 During the month, she billed her clients $ 12,000 for services rendered.
25 She received $ 9,000 in cash from the clients who were previously billed.
30 At month end, she received a bill for electric service in the amount of $ 300. She will pay the bill in August.
30 During the month, she paid $ 500 for food to provide lunch to her clients.
31 She paid the bank $ 1,100 on the borrowing. Of that amount, $ 1,000 was for the principal payment on the loan, and $ 100 was for interest.