Karen Tong, D.D.S., and Karen Allman Company

Karen Tong, D.D.S., opened a dental practice on January 1, 2002. During the first month
of operations the following transactions occurred.
1. Performed services for patients who had dental plan insurance. At January 31, $875 of such
services was earned but not yet billed to the insurance companies.
2. Utility expenses incurred but not paid prior to January 31 totaled $520.
3. Purchased dental equipment on January 1 for $80,000, paying $20,000 in cash and signing
a $60,000, 3-year note payable. The equipment depreciates $400 per month. Interest is $500
per month.
4. Purchased a one-year malpractice insurance policy on January 1 for $12,000.
5. Purchased $1,600 of dental supplies. On January 31, determined that $700 of supplies were
on hand.
Instructions
Prepare the adjusting sentries on January 31. Account titles are: Accumulated Depreciation-Dental Equipment, Depreciation Expense, Service Revenue, Accounts Receivable, Insurance Expense, Interest Expense, Interest Payable, Prepaid Insurance, Supplies, Supplies Expense, Utilities Expense, and Utilities Payable.

E3-5 Selected work sheet data for Karen Allman Company are presented below.

Account Titles Trial Balance Adjusted Trial Balance
Dr. Cr. Dr. Cr.
Accounts Receivable ? 34,000
Prepaid Insurance 26,000 18,000
Supplies 9,000 ?
Accumulated Depreciation 12,000 ?
Salaries Payable ? 6,000
Service Revenue 88,000 95,000
Insurance Expense ?
Depreciation Expense 10,000
Supplies Expense 4,000
Salaries Expense ? 49,000
Instructions
(a) Fill in the missing amounts.
(b) Prepare the adjusting entries that were made.