BTN 12-3 Doctors Maben, Orlando, and Clark have been in a group practice for several years. Maben and Orlando are family practice physicians, and Clark is a general surgeon. Clark receives many referrals for surgery from his family practice partners. Upon the partnership’s original formation, the three doctors agreed to a two-part formula to share income. Every month each doctor receives a salary allowance of $3,000. Additional income is divided according to a percent of patient charges the doctors generate for the month. In the current month, Maben generated 10% of the billings, Orlando 30%, and Clark 60%. The group’s income for this month is $50,000. Clark has expressed dissatisfaction with the income-sharing formula and asks that income be split entirely on patient charge percents.
Required
1. Compute the income allocation for the current month using the original agreement.
2. Compute the income allocation for the current month using Clark’s proposed agreement.
3. Identify the ethical components of this partnership decision for the doctors.
Click here for the solution: Doctors Maben, Orlando, and Clark have been in a group practice for several years
Showing posts with label practice. Show all posts
Showing posts with label practice. Show all posts
Friday, August 14, 2015
Sunday, July 19, 2015
Andy Wright,D.D.S., opened a dental practice on January 1, 2008
Exercise 3-8 (E3-8) Andy Wright,D.D.S., opened a dental practice on January 1, 2008. 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 recorded.
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 $400 of supplies were on hand.
Instructions
Prepare the adjusting entries 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
Click here for the solution: Andy Wright,D.D.S., opened a dental practice on January 1, 2008
1. Performed services for patients who had dental plan insurance. At January 31, $875 of such services was earned but not yet recorded.
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 $400 of supplies were on hand.
Instructions
Prepare the adjusting entries 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
Click here for the solution: Andy Wright,D.D.S., opened a dental practice on January 1, 2008
Saturday, July 11, 2015
Troy Ridgell incorporated Ridgell Consulting, an accounting practice, on May 1, 2012
P3-5B Troy Ridgell incorporated Ridgell Consulting, an accounting practice, on May 1, 2012. During the first month of operations, these events and transactions occurred. May 1 Stockholders invested $40,000 cash in exchange for common stock of the corporation.
2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $800 of supplies on account from Fleming Supply Company.
7 Paid office rent of $1,400 for the month.
11 Completed a tax assignment and billed client $1,500 for services provided.
12 Received $4,200 advance on a management consulting engagement.
17 Received cash of $3,300 for services completed for Goodman Co.
31 Paid secretary-receptionist $2,000 salary for the month.
31 Paid 50% of balance due Fleming Supply Company.
The company uses the following chart of accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.
Instructions
(a) Journalize the transactions, including explanations.
(b) Post to the ledger T accounts.
(c) Prepare a trial balance on May 31, 2012.
Check:
(c) Cash $43,700
Tot. trial balance $49,400
Click here for the solution: Troy Ridgell incorporated Ridgell Consulting, an accounting practice, on May 1, 2012
2 Hired a secretary-receptionist at a salary of $2,000 per month.
3 Purchased $800 of supplies on account from Fleming Supply Company.
7 Paid office rent of $1,400 for the month.
11 Completed a tax assignment and billed client $1,500 for services provided.
12 Received $4,200 advance on a management consulting engagement.
17 Received cash of $3,300 for services completed for Goodman Co.
31 Paid secretary-receptionist $2,000 salary for the month.
31 Paid 50% of balance due Fleming Supply Company.
The company uses the following chart of accounts: Cash, Accounts Receivable, Supplies, Accounts Payable, Unearned Service Revenue, Common Stock, Service Revenue, Salaries and Wages Expense, and Rent Expense.
Instructions
(a) Journalize the transactions, including explanations.
(b) Post to the ledger T accounts.
(c) Prepare a trial balance on May 31, 2012.
Check:
(c) Cash $43,700
Tot. trial balance $49,400
Click here for the solution: Troy Ridgell incorporated Ridgell Consulting, an accounting practice, on May 1, 2012
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