Question

Chapter 3 Adjusting Accounts for a 1 titute poside Following is the unadjusted trial balance for Aloe The Institute pro al balance for Alonzo Institute as of December Institute as of one-on-one training to individuals who pay tuition directly to the business and offers extensa no site locations. Shown after the real holandese tea c h that entries as of December 31. s and offers extension training to is a through that require adjusting P1 P2 P3A ALONRO INSTITUTE Unadjusted Trial Balance $ 60,000 70,000 19.000 3.800 12.000 $ 2,500 40.000 20.000 11200 28600 11000 60.500 129 200 2000 29,600 Utstiese 19.000 3400 $331.000 $331,000 Additional Information a. An analysis of the Institute's insurance policies shows that $9.500 of coverage has expired. b. An inventory count shows that teaching supplies costing $20,000 are available at year-end c. Annual depreciation on the equipment is $5,000 d. Annual depreciation on the professional library is $2.400 .. On November 1, the Institute agreed to do a special two-month course (starting immediately) for a client. The contract calls for a $14,300 monthly fee, and the client paid the two months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. t. On October 15, the Institute agreed to teach a four-month class (beginning immediately) to an execu- tive with payment due at the end of the class. At December 31, 55,750 of the tuition has been earned by the Institute. 9. The Institute's only employee is paid weekly. As of the end of the year, three days' salaries have accrued at the rate of $150 per day. h. The balance in the Prepaid Rent account represents rent for December. Required 1. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance 2. Prepare the necessary adjusting journal entries for items a through h, and post them to the T-accounts Assume that adjusting entries are made only at year-end. . Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance - Prepare the company's income statement and statement of retained earnings for the year, and prepare its balance sheet as of December 31. The Retained Earnings account balance was $60,500 on December 31 on December 31 Check Dej Earned $28.500 (2) Tuition $5.750 of the prior year. 344 500 4 Nenom

Answer 1

Answer-2 Adjusted trial balance Alonzo Institute Dec-31 Accounts title Debit Credit Cash Accounts receivable Teaching Supplies Prepaid Insurance 60,000 5,750 20,000 9,500 Prepaid rent Professional Library Accumulated Derpreciation-Professional libraray Equipment Accumulated Derpreciation-Equipment Accounts payable Salaries payable Unearned training fees 12,000 4,900 40,000 25,000 $ 11,200 450 Common Stock retained eam ings Dividend 11,000 60,500 20,000 Tution fees Earned $ 1,34,950 Training fees Earned Depreciation Expense- professional library 96,600 2,400 Depreciation Expense-E quipment Salaries Expense 5,000 44,650 Insurance expense 9,500 Rent Expense Teaching Supplies Expense Advertising expense 33,400 50,000 19,000 Utilities Expense 13,400 3,44,600 $ Total 3,44,600 Answer-2 In the books of Alonzo Institute Journal Entries Particulars Sl.no. Debit Credit (a) Insurance Expense 9,500 Prepaid insurance (being insurance accrued) 9,500 Teaching Supplies Expense Teaching Supplies (being expenses accrued) (b) $ 50,000 50,000 Depreciation Expense-Equipment Accumulated Derpreciation- Equipment (being depreciation accounted) (c) 5,000 5,000 Depreciation Expense- professional library (d) $ 2,400 Accumulated Derpreciation-Professional libraray $ 2,400 (e) Unearned training fees Training fees Earned (be ing training fees accrued) 28,600 28,600 (f) Accounts receivable Tution fees Earned 5,750 5,750 (being tution fees earned) Salaries Expense Salaries payable (being salaries accrued) (g) 450 450 (h) Rent expense $ 3,800 Prepaid rent |(being rent accrued) 3,800 Answer-4 Alonzo Institute Income Statement for the year ended December 31 Particulars Amount Amount Revenue $ Tution fees Earned 1,34,950 Training fees Earned 96,600 Total revenue 2,31,550 Expenses Depreciation Expense- professional library Depreciation Expense-Equipment Salaries Expense Insurance expense 2,400 5,000 44,650 9,500 Rent Expense Teaching Supplies Expense Advertising expense Utilities Expense Total Expenses 33,400 50,000 19,000 13,400 $ 1,77,350 Net Income 54,200 Alonzo Institute Balance Sheet as on December 31 Particulars Amount Amount Assets Current Assets Cash 60,000 Accounts receivable 5,750 Teaching Supplies Prepaid Insurance 20,000 9,500 Total Current assets 95,250 Fixed Assets Professional Library 12,000 Accumulated Derpreciation- Professi onal libraray $ -4,900 $ 7,100 Equipment Accumulated Derpreciation-Equipment 40,000 - 25,000 $ 15,000 $ 1,17,350 Total Assets Liabilities Current liabilties Accounts payable 11,200 Salaries payable Total Current Liabilities 450 11,650 Owners Equity Common Stock Retained earnings 11,000 opening balance Add: Net profit $ 60,500 54,200 Less: Dividend paid 20,000 Closing balance Total Owners Equity $ 94,700 1,05,700 Total liabilities $1,17,350 Statement of retained eamings Particulars Opening balance Add: Net profit Amount 60,500 $ 54,200 Less: Dividend paid 20,000 Closing balance $ 94,700