Question

After five years of operations, Svenson’s Tutoring Clinic showed the following post-closing balances at December 31, 2019.

Cash
	2,000

Accounts Receivable
	5,000

Prepaid Rent
	3,000

Office Equipment
	20,000

Accumulated Depreciation, Office Equipment
		10,000

Unearned Revenue
		2,900

Leda Svenson, Capital
		17,100

Leda Svenson, Withdrawals
	0

Tutoring Revenue
		0

Rent Expense
	0

Depreciation Expense
	0

Advertising Expense
	0

Required:

a. Not available in connect.

b. Journalize and post the following transactions that occurred during 2020. (If the beginning balance is "0", select the date and enter "0" in the amounts column.)

Jan.	15	Provided $8,000 of tutoring services on account.
Feb.	20	Paid $2,000 for advertising that appeared in today’s newspaper.
Jul.	7	Collected $9,000 from credit customers.
Dec.	10	The owner withdrew $3,000 cash for personal use.

c. Prepare an unadjusted trial balance as at December 31, 2020.

d. Journalize and post the adjusting entries on December 31, 2020, based on the following additional information: (If the beginning balance is "0", select the date and enter "0" in the amounts column.)

– Annual depreciation on the office equipment is $2,000.
– $2,400 of the balance in unearned revenue has been earned.
– The entire balance in prepaid rent has expired.

e. Prepare an adjusted trial balance at December 31, 2020.

f-1. Prepare an income statement for the year ended December 31, 2020.

f-2. Prepare a statement of changes in equity for the year ended December 31, 2020.

f-3. Prepare a classified balance sheet at December 31, 2020.

g. Journalize and post the closing entries.

h. Prepare a post-closing trial balance.

Answer 1

Svenson’s Tutoring Clinic
Req b
Journal entries
Date	Account	Debit	Credit
15-Jan	Accounts Receivable	$        8,000
	Tutoring Revenue		$        8,000
20-Feb	Advertising expense	$        2,000
	Cash		$        2,000
7-Jul	Cash	$        9,000
	Accounts Receivable		$        9,000
10-Dec	Leda Svenson, Withdrawals	$        3,000
	Cash		$        3,000
Req d
Adjusting entries
31-Dec	Depreciation expense	$        2,000
	Accumulated Depreciation-Office Equipment		$        2,000
31-Dec	Unearned Revenue	$        2,400
	Tutoring Revenue		$        2,400
31-Dec	Rent expense	$        3,000
	Prepaid Rent		$        3,000
Req g
Closing entries
31-Dec	Tutoring Revenue	$     10,400
	Income Summary		$     10,400
31-Dec	Income Summary	$        7,000
	Rent expense		$        3,000
	Depreciation expense		$        2,000
	Advertising expense		$        2,000
31-Dec	Income Summary	$        3,400
	Leda Svenson, Capital		$        3,400
31-Dec	Leda Svenson, Capital	$        3,000
	Leda Svenson, Withdrawals		$        3,000

Svenson's Tutoring Clinic Reqb, dg T Accounts Date Debit Date Credit Cash Op bal $ 2,000 20-Feb $ 2,000 7-Jul $ 9,000 10-Dec $ 3,000 Date Debit Date Credit Date Accounts Receivable Op bal $5,000 7-Jul $ 9,000 Op bal 15-Jan $ 8,000 Debit Date Credit Prepaid Rent $3,000 31-Dec $ 3,000 Bal. Bal. $ 6,000 Office Equip $ 20,000 $ 4,000 Accum. Depr. - Office Equip Op bal $10,000 31-Dec $ 2,000 Bal. $ . Unearned Revenue 31-Dec $ 2,400 Op bal Op bal $ 2,900 Bal. $ 20,000 Leda Svenson, Capital 31-Dec $ 3,000 Op bal $17,100 31-Dec $ 3,400 Bal. $ 12,000 Leda Svenson, Withdrawals 10-Dec $ 3,000 31-Dec $ 3,000 Bal. $ 500 Tutoring Revenue 15-Jan $ 8,000 31-Dec $ 10,400 31-Dec $ 2,400 Bal. $ 17,500 Rent expense 31-Dec $ 3,000 31-Dec $ 3,000 Bal. $ . Depreciation expense 31-Dec $ 2,000 31-Dec $ 2,000 Bal. $ - Advertising expense 20-Feb $ 2,000 31-Dec $ 2,000 Bal. $ . Bal. $ . Bal. $ .

Reqe Adjusted TB Debit Credit 6,000 4,000 Reqh Post Closing TB Debit Credit 6,000 4,000 Reqc Unadjusted TB Debit Credit 6,000 4,000 3,000 20,000 10,000 2,900 17,100 3,000 8,000 20,000 Svenson's Tutoring Clinic Account Names Cash Accounts Receivable Prepaid Rent Office Equipment Accumulated Depreciation Office Equipment Unearned Revenue Leda Svenson, Capital Leda Svenson, Withdrawals Tutoring Revenue Rent expense Depreciation expense Advertising expense Totals 20,000 12,000 500 17,100 12,000 500 17,500 3,000 10,400 3,000 2,000 2,000 40,000 2,000 38,000 38,000 40,000 30,000 30,000

10,400 Svenson's Tutoring Clinic Income Statement For the Year Ended December 31, 2020 Revenues Tutoring Revenue Expenses Rent expense Depreciation expense Advertising expense Total Expenses Net Income 3,000 2,000 2,000 7,000 3,400 Statement of Changes in Equity For the Year Ended December 31, 2020 Capital, Jan 1, 2020 Add: Net Income 17,100 3,400 20,500 (3,000) 17,500 Less: Withdrawals Capital, Dec 31, 2020

Svenson's Tutoring Clinic Balance Sheet As of December 31, 2020 Assets Current Assets Cash Accounts Receivable Total Current Assets Liabilities & Equity Current Liabilities 6,000 Unearned Revenue 4,000 10,000 500 17,500 Property, Plant & Equipment Office Equipment Accumulated Depreciation Office Equipment Total Property, Plant & Equipment Equity 20,000 Capital (12,000) 8,000 Total Assets 18,000 Total Liabilities & Equity 18,000