Docs in a Box, Inc., an almost-full service urgent care center, began business on December 1. The following data summarize the events that took place during the first month of operations:
- Two semi-retired physicians contributed a total of $65,000 in cash to help the organization get started. They each planned to work for the center 20 hours per week.
- One of the physicians took out a $30,000 mortgage on her home to replace her investment in the center.
- The center borrowed $15,000 on a one-year note, at an interest rate of 10%.
- Equipment and furniture, with an estimated useful life of 12 years and no salvage value, were acquired and installed at a cost of $36,000, paid in cash.
- $25,000 of medical supplies were acquired on account.
- The center signed a rental agreement for $72,000 for the first year of operations, and made its first monthly rental payment, in cash, of $6,000.
- Revenue for the month was 40,000. Of this, $8,000 was on account and the rest in cash.
- Semimonthly wages of $4,000 were earned and paid in cash.
- At mid-month, a new part-time employee was hired at an annual salary of $12,000.
- $3,000 was received from patients in payment on their accounts.
- The center paid 21,000 to its suppliers for medical supplies previously acquired.
- The medical supply inventory at the end of the month was $15,000.
- Semimonthly wages of $4,500 were earned as of December 31, but the next payday wasn't until January 2.
- $1,250 of the loan principal was repaid. No interest payments were made.
- Prepare an income statement for December, and a balance sheet as of December 31.