Can We Help?, a Local Walk-In Medical Practice, Had the Following

Essay

Can We Help?, a local walk-in medical practice, had the following account balances at December 31, 2019: During 2020, the following transactions occurred:
1.On March 1, purchased a one-year mal-practice insurance policy for $12,000 cash.
2.On July 1, borrowed $50,000 cash from First American Bank. The interest rate on the note payable is 8%. Principal and interest is due in cash in one year.
3.Employee salaries in the amount of $23,000 were paid in cash.
4.At the end of the year, $1,000 of the supplies remained on hand.
5.Provided $100,000 in consulting services for cash during 2013 in cash.
6.At December 31, $6,000 in employee salaries were accrued.
7.On December 31, received $10,000 in cash representing advance payment for services to be provided in February 2021.
8.Annual depreciation on the building is based on a useful life of 20 years and no salvage value.
Required:
A)Determine the effect on the accounting equation of the preceding transactions including any related year-end adjusting entries that may be required. Hint: It may be helpful to create a table to reflect the increases and decreases in accounts.
B)Prepare an income statement for 2020 ignoring income taxes.
C)Prepare a statement of retained earnings for 2020 assuming no dividends were paid.
D)Prepare a classified balance sheet at December 31, 2020.