Question

a. An analysis of WTI's insurance policies shows that $2.807 of coverage has expired. b. An inventory count shows that teaching supplies costing $2.433 are available at year-end. c. Annual depreciation on the equipment is $11,227 d. Annual depreciation on the professional library is $5,614 e. On September 1, WTI agreed to do five courses for a client for $2.900 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $14,500 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. f. On October 15, WTI agreed to teach a four-month class (beginning immediately for an executive with payment due at the end of the class. At December 31, $6,548 of the tuition has been earned by WTI. g. WTi's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee. h. The balance in the Prepaid Rent account represents rent for December

Answer 1

a) $2807 shall be charged to Profit and loss account.

b) Teaching supplies costing $2433 will for part of closing inventory and will be shown in trading account and as current asset in Balancesheet

c) Depreciation on equipment will be charged to Profit and Loss account and will reduce the balance of asset in Balance sheet.

d) Depreciation on Professional Library will be charged to Profit and Loss account and will reduce the balance of asset in Balance sheet.

e) Amount of two courses amounting to $ 5800 should be Recongnised as income in current year.

f) the amount mentioned should form part of revenue in Profit and loss account and as current asset in Balance sheet.

g) This amount will be charged to profit and loss account and shown as Current Liability in Balance sheet.

h) Prepaid rent should be recongnise as Expense of current Year