1. **Problem Statement:** Make a trial balance for Dr. Romulo Mercado's medical practice as of October 31, 2025, after recording all transactions for the month. 2. **What is a Trial Balance?** A trial balance is a list of all ledger accounts and their balances at a particular date. It ensures that total debits equal total credits, verifying the ledger's accuracy. 3. **Steps to Prepare the Trial Balance:** 1. List all accounts with their respective debit or credit balances. 2. Sum the debit balances and credit balances separately. 3. Verify that total debits equal total credits. 4. **Calculate Balances from Transactions:** - Cash (110): +250,000 (capital) -150,000 (clinic and land cash portion) -60,000 (equipment cash portion) -39,000 (medical supplies cash) +117,000 (cash from patients) -73,000 (salaries) -23,000 (repairs) -3,000 (telephone) +113,000 (collections) -13,000 (payment to Rawis) -200,000 (withdrawal) -15,000 (association dues) Calculate cash balance: $$250000 - 150000 - 60000 - 39000 + 117000 - 73000 - 23000 - 3000 + 113000 - 13000 - 200000 - 15000 = 32000$$ - Accounts Receivable (120): +317,000 (billed patients) -113,000 (collections) Balance: $$317000 - 113000 = 204000$$ - Medical Supplies (130): +39,000 (cash purchase) +17,000 (on account) Balance: $$39000 + 17000 = 56000$$ - Prepaid Insurance (140): +20,000 (insurance) - Land (150): +250,000 (acquisition) - Medical Building (160): +1,000,000 (acquisition) - Medical Equipment (170): +420,000 (acquisition) +45,000 (on account) Balance: $$420000 + 45000 = 465000$$ - Notes Payable 24% (210): +360,000 (equipment note: 420,000 - 60,000 cash) - Notes Payable 20% (220): +1,050,000 (clinic and land note: 1,250,000 - 150,000 cash) - Accounts Payable (230): +45,000 (equipment on account) +17,000 (supplies on account) -13,000 (payment) Balance: $$45000 + 17000 - 13000 = 49000$$ - Salaries Expense (510): +73,000 (paid salaries) - Repairs Expense (530): +23,000 (repairs) - Telephone Expense (560): +3,000 (telephone bill) - Association Dues Expense (550): +15,000 (dues) - Mercado, Capital (310): +250,000 (initial capital) - Mercado, Withdrawals (320): +200,000 (withdrawal) - Medical Revenues (410): +434,000 (117,000 cash + 317,000 billed) 5. **Trial Balance Table:** | Account | Debit | Credit | |-------------------------|------------|------------| | Cash (110) | 32,000 | | | Accounts Receivable (120)| 204,000 | | | Medical Supplies (130) | 56,000 | | | Prepaid Insurance (140) | 20,000 | | | Land (150) | 250,000 | | | Medical Building (160) | 1,000,000 | | | Medical Equipment (170) | 465,000 | | | Notes Payable 24% (210) | | 360,000 | | Notes Payable 20% (220) | | 1,050,000 | | Accounts Payable (230) | | 49,000 | | Salaries Expense (510) | 73,000 | | | Repairs Expense (530) | 23,000 | | | Telephone Expense (560) | 3,000 | | | Association Dues (550) | 15,000 | | | Mercado, Capital (310) | | 250,000 | | Mercado, Withdrawals (320)| 200,000 | | | Medical Revenues (410) | | 434,000 | | **Totals** | **2,591,000**| **2,591,000**| 6. **Verification:** Total Debits = Total Credits = 2,591,000 This confirms the ledger is balanced and the trial balance is correct.