Question

Collins Technical Institute (CTI), a school owned by Carolyn Collins, provides training to individuals who pay tuition directly to the school. CTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, is found on the trial balance tab. CTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31. An analysis of CTI’s insurance policies shows that $2,700 of coverage has expired. An inventory count shows that teaching supplies costing $3,760 are available at year-end. Annual depreciation on the equipment is $4,800. Annual depreciation on the professional library is $9,000. On September 1, CTI agreed to do five courses for a client for $3,200 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 $16,000 cash in advance for all five courses on September 1, and CTI credited Unearned Training Fees. On October 15, CTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $9,000 of the tuition has been earned by CTI. CTI’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. The balance in the Prepaid Rent account represents rent for December.

Please help with the Net income before adjustments & Net income after adjustments

Income statement

Requirement General Journal General Ledger Trial Balance Income Statement St Owner Equity Balance Sheet Impact on income Use the drop-downs to select the accounts properly included on the income statement. The unadjusted or adjusted balances will appear for each account, based on your selection. Adjusted Collins Technical Institute Income Statement For Year Ended December 31 Revenues Tuition fees earned Training fees earned t 141.000 50,400 0 S 191,400 9,000 Total revenues Expenses Depreciation expense - Professional library Depreciation expense - Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense 494 4,800 51,320 2.700 39,000 0 6,050 7.000 olol Total expenses Net income 120,470 70.930 S < Trial Balance St Owner Equity >

unadjusted added

Answer 1

Answer

Debit Credit a. b. Account Description Insurance expense Teaching Supplies Expense Depreciation Expense Depreciation Expense Unearned training fees |A/R Salaries expense Rent expense 2,700 5,440 4,800 9,000 c. d. Account Description 2,700 Prepaid Insurance 5,440 Teaching supplies 4,800 Accumulated Depreciation -equipment 9,000 Accumulated Depreciation -library 6,400 Training fees earned 9,000 Tuition fees earned 720 Salaries payable 3,600 Prepaid rent 41,660 6,400 e. f. 9,000 720 3,600 h. Unadjusted Income Statement 31-Dec-17 Revenues Tuition fees earned Training fees earned Adjusted Income Statement 31-Dec-17 Revenues Tuition fees earned Training fees earned 132,000 44,000 141,000 50,400 191,400 Total revenues Expenses Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense 50,600 176,000 Total revenues Expenses Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense 9,000 4,800 51,320 2,700 43,200 5,440 6,050 7,000 39,600 6,050 7,000 Total expense Net Income 103,250 Total expense 72,750 Net Income 129,510 61,890 Total impact on income due to adjustments Net Income before adjustments Net Income after adjustments Had the adjustments not prepared income would have been overstated by (10,860) 72,750 61,890 14.93%