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

Adjustment entries

At the end of the year		Amt	Amt
a)	Insurance expense	$     9,500
	To Prepaid Insurance		$     9,500
b)	Teaching supplies expense	$   50,000
	To Teaching Supplies		$   50,000
c&d)	Depreciation expense- Equipment	$     5,000
	Depreciation expense- Professional Library	$     2,400
	To Accumulated Depreciation - Equipment		$     5,000
	To Accumulated Depreciation - Professional Library		$     2,400
e)	Unearned Training fees	$   28,600
	To Earned Training fees		$   28,600
f)	Accounts Receivable	$     5,750
	To Earned Tuition fees		$     5,750
g)	Salaries expense	$        450
	To Salaries payable		$        450
h)	Rent expense	$     3,800
	To Prepaid rent		$     3,800

	Insurance expense A/c					Prepaid Insurance A/c
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To Prepaid Insurance	$    9,500				To Balance b/f	$       19,000	By Insurance expense	$         9,500
		By P&L a/c	$       9,500				By balance c/f	$         9,500
Total	$    9,500	Total	$       9,500		Total	$       19,000	Total	$       19,000
	Teaching supplies expense a/c					Teaching Supplies a/c
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To Teaching supplies	$   50,000				To balance b/f	$       70,000	By Teaching supplies expense	$       50,000
		By P&L a/c	$     50,000				By balance c/f	$       20,000
Total	$   50,000	Total	$     50,000		Total	$       70,000	Total	$       70,000

Depreciation-Equipment

Accumulated Depreciation - Equipment

Accumulated Depreciation - Professional Library

Particulars

Amount

Particulars

Amount

Particulars

Amount

Particulars

Amount

Particulars

Amount

Particulars

Amount

To Accumulated Depreciation - Equipment

$    5,000

By balance b/f

$       20,000

By balance b/f

2500

By P&L a/c

$       5,000

To Balance c/f

$       25,000

By depreciation

$         5,000

To balance c/f

4900

By depreciation

2400

Total

$    5,000

Total

$      5,000

Total

$       25,000

Total

$       25,000

Total

4900

Total

4900

	Unearned Training fees					Earned Training fees
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To Earned Training fees	$   28,600	By balance b/f	$     28,600				By balance b/f	$       68,000
					To Balance c/f	$       96,600	By Unearned training fee	$       28,600
Total	$   28,600	Total	$     28,600		Total	$       96,600	Total	$       96,600
	Accounts Receivable					Earned Tuition fees
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To Balance b/d	$         -						By balance b/f	$     129,200
To Earned Tuition fees	$    5,750	By balance c/f	$       5,750		To Balance c/f	$     134,950	By Accounts receivable	$         5,750
Total	$    5,750	Total	$       5,750		Total	$     134,950	Total	$     134,950
	Salaries expense					Salaries payable
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To balance b/f	$   44,200						By balance b/f	$              -
To salaries payable	$       450	By P&L a/c	$     44,650		To Balance c/f	$           450	By Salaries expense	$           450
Total	$   44,650	Total	$     44,650		Total	$           450	Total	$           450
	Rent Expense					Prepaid Rent A/c
Particulars	Amount	Particulars	Amount		Particulars	Amount	Particulars	Amount
To balance b/f	$   29,600				To Balance b/f	$         3,800	By Rent expense	$         3,800
To Prepaid rent	$    3,800
		By P&L a/c	$       33400
Total	$    33400	Total	$ 33400		Total	$         3,800	Total	$         3,800

Adjusted Trial Balance
December 31st	Debit	Credit
Cash	$   60,000
Accounts Receivable	$     5,750
Teaching Supplies	$   20,000
Prepaid Insurance	$     9,500
Prepaid Rent	$          -
Professional Library	$   12,000
Accumulated Depreciation - Professional Library		$     4,900
Equipment	$   40,000
Accumulated Depreciation - Equipment		$   25,000
Accounts Payable		$   11,200
Salaries Payable		$        450
Unearned training fees		$          -
Common stock		$   11,000
Retained Earnings		$   60,500
Dividends	$   20,000
Tuition fees earned		$ 134,950
Training fees earned		$   96,600
Depreciation expense - Professional Library	$     2,400
Depreciation expense - Equipment	$     5,000
Salaries expense	$   44,650
Insurance Expense	$     9,500
Rent Expense	$   33,400
Teaching Supplies expense	$   50,000
Advertising Expense	$   19,000
Utilities Expense	$   13,400
Totals	$ 344,600	$ 344,600