Question

Account Title Credit $ Debit 49,100 8,200 7,800 3,800 53,000 21,200 72,000 Cash Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation - Professional library Equipment Accumulated depreciation - Equipment Accounts payable Unearned training fees Common stock Retained earnings Dividends Tuition fees earned Training fees earned Salaries expense Rent expense Advertising expense Utilities expense 14,400 30,800 16,000 9,000 89,000 51,200 128,000 42,000 50,800 41,800 6,100 6,600 350,400 $ Total 350,400

Above is the unadjusted trial balance.

Gonzalez Technical Institute (GTI), a school owned by Maria Gonzalez, provides training to individuals who pay tuition directly to the school. GTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2018, is found on the trial balance tab. GTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31 follow.

1. An analysis of GTI’s insurance policies shows that $2,600 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,960 are available at year-end.
3. Annual depreciation on the equipment is $7,200.
4. Annual depreciation on the professional library is $10,600.
5. On November 1, GTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $3,200, and the client paid the first five months’ fees in advance. When the cash was received, the Unearned Training Fees account was credited.
6. On October 15, GTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $3,800 of the tuition has been earned by GTI.
7. GTI’s two employees are paid weekly. As of the end of the year, two days’ salaries have accrued at the rate of $180 per day for each employee.
8. The balance in the Prepaid Rent account represents rent for December.

Need general journal, income statement, balance sheet, and impact on income

Answer 1

Gonzalez Technical Institute (GTI) Adjusting Enteries Date Particulars 31.12.2018 Insurance Expense a/c To Prepaid Insurance (Insurance expensed) Dr. Debit in $ Credit in $ 2600 2600 Dr. 5240 31.12.2018 Teaching supplies expense a/c To Supplies (Supplies expensed) 8200-2960 5240 7200 31.12.2018 Depreciation expense-Equipment a/c Dr. To Accumulated depreciation-Equipment (To record depreciation) 7200 10600 31.12.2018 Depreciation expense- Professional library a/c Dr. To Accumulated depreciation-Professional library (To record depreciation) 10600 Dr. 6400 31.12.2018 Unearned Training Fees a/c To Training fees earned (Revenue recognized) 3200 x 2 6400 Dr. 3800 31.12.2018 Accounts receivable a/c To Tuition fees earned (Revenue accrued) 3800 31.12.2018 Salaries expense a/c To Salaries payable (Salary expense accrued) 2 x 2 x 180 = 400 Dr. 3800 31.12.2018 Rent Expense a/c To Prepaid Rent (Rent expensed) 3800

Debit in $ Credit in $ 49100 3800 2960 5200 53000 31800 72000 Adjusted Trial Balance For the period ending 31.12.2018 Particulars Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees Common Stock Retained Earnings Dividends Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 21600 30800 720 9600 9000 89000 51200 131800 48400 10600 7200 51520 2600 45600 5240 6100 6600 372720 372720

Statement of Income For the period ending 31.12.2018 Tuition fees earned Training fees earned 131800 48400 180200 Less: Depreciation expense- Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Net Income 10600 7200 51520 2600 45600 5240 6100 6600 135460 44740 Statement of Retained Earnings For the period ending 31.12.2018 Beginning Balance Add:Net Income 89000 44740 133740 -51200 82540 Dividends

Amounts in $ Amounts in $ Balance sheet As at 31.12.2018 Assets Current Assets Cash Accounts receivable Teaching supplies Prepaid insurance Amounts in $ Amounts in $ Liabilites & Equity Current Liabilities 49100 Accounts payable 3800 Salaries payable 2960 Unearned training fees 5200 61060 30800 720 9600 41120 Non Current Assets Professional library Accumulated depreci Equipment Accumulated depreci Total Assets 53000 -31800 72000 -21600 21200 Shareholders Equity Common Stock 50400 Retained Earnings 132660 Total Liabilities & Equity 9000 82540 91540 132660