AC107 Unit 3 100% correct- Adjusting Entries

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School

Herzing University *

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Course

107

Subject

Accounting

Date

Apr 3, 2024

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xlsx

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Katys Cooking School Unadjusted Trail balance December 31 201X Debit Credit Cash 34,000 Accounts receivable - Teaching supplies 8,000 Ppd Insurance 12,000 Ppd Rent 3,000 Prof Library 35,000 Accum Depr Lib 10,000 Equipment 80,000 Accum Drp Equip 15,000 Accounts Payable 26,000 Salaries payable - Unearned tn fees 12,500 Capital 90,000 Draw 50,000 Tuition fees earned 123,900 Training fees earned 40,000 Depr expense prof libra - Depr expense equipmen - Salary expense 50,000 Insurance expense - Rent expense 33,000 Teach supply expense - Advertising expense 6,000 Utilities expense 6,400 Totals 317,400 317,400 Katy's Cooking School provides training to individuals who pay tuition directly to the school. Katy's also offers training to various groups in off-site locations. Starting from the trial balance prepare the adjusting entries and post them to the general ledger and then prepare an Adjusted Trail Balance and then prepare the financial Statements.

1 Enter the account balances from the trail balance in the General Ledger 2 Journal the following adjusting Entries a An analysis of the insurance policies show that $2400 of coverage has expired b An inventory count shows that teaching supplies costing $2,800 are available at year-end. c Annual Depreciation on the equipment is $13,200 d Annual Depreciation on the professional library is 7200 e f g h The balance in the Prepaid Rent account represents rent for December. General Journal Debit Credit a Insurance expense 2,400 Prepaid Insurance 2,400 b Teaching Supplies Expense 5,200 Teaching Supplies 5,200 c Depr Equipment Expense 13,200 Accum Drp Equip 13,200 d Depr expense prof library 7,200 Accum Depr Lib 7,200 On Nov 1 Katy agreed to do a special 6 month course starting immediately for a student. The contract calls for a monthly fee of $2500 and the student paid the first 5 months fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the 6th month will be recorded when it is collected next year. On October 15 Katy agreed to teach a 4 month class beginning immediately for a student for $3000 tuition per month payable at the end of class. The class started on October 15 but no payment as yet been received. Katy's accruals are applied to the nearest half month. Katy'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.

e Unearned income 5,000 Training fees earned 5,000 f Accounts Receivable 6,000 Tuition fees earned 6,000 g Salary expense 400 Salary payable 400 h Rent expense 3,000 Prepaid rent 3,000

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Cash accounts receivable Ref Debit Credit Balance Ref Debit Credit Balance 7 34,000 34,000 61 6,000 6,000 Teaching Supplies Ppd Insurance Ref Debit Credit Balance Ref Debit Credit Balance 9 8,000 8,000 10 12,000 12,000 50 5,200 2,800 47 2,400 9,600 Ppd Rent Ref Debit Credit Balance Ref Debit Credit Balance 11 3,000 3,000 - 68 3,000 - - - - - - Equipment Accum Depr Equipment Ref Debit Credit Balance Ref Debit Credit Balance 14 80,000 80,000 15 15,000 15,000 53 13,200 28,200 Prof. Library Accum Depr Library Ref Debit Credit Balance Ref Debit Credit Balance 12 35,000 35,000 13 10,000 10,000

56 7,200 17,200 Salaries payable Accounts Payable Ref Debit Credit Balance Ref Debit Credit Balance 65 400 400 16 26,000 26,000 Unearned Income Capital/equity Ref Debit Credit Balance Ref Debit Credit Balance 18 12,500 12,500 19 90,000 90,000 58 5,000 7,500 Draw Tuition and Fees earned Ref Debit Credit Balance Ref Debit Credit Balance 20 50,000 50,000 21 123,900 123,900 62 6,000 129,900 Training fees earned Utility Expense Ref Debit Credit Balance Ref Debit Credit Balance 22 40,000 40,000 30 6,400 6,400 59 5,000 45,000

Depreciation exp - Equipmt Salary Expense Ref Debit Credit Balance Ref Debit Credit Balance 52 13,200 13,200 25 50,000 50,000 64 400 50,400 rent Expense Teach Supply Expense Ref Debit Credit Balance Ref Debit Credit Balance 27 33,000 33,000 49 5,200 5,200 67 3,000 36,000 Insurance expense Depr Expense Prof Library Ref Debit Credit Balance Ref Debit Credit Balance 46 2,400 2,400 55 7,200 7,200 Advertising Expense Ref Debit Credit Balance 29 6,000 6,000

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Adjusted Trail Balance TRIAL BALANCE Adjusted TB Accounts DR CR Cash 34,000 Accounts Receivable 6,000 Teaching Supplies 2,800 PPD Insurance 9,600 PPD Rent Equipment 80,000 Accum Depr Equipment 28,200 Prof Library 35,000 Accum Depr Library 17,200 Salaries Payable 400 Accounts Payable 26,000 Unearned income 7,500 Capital/Equity 90,000 Draw 50,000 Tuition and Fees Earned 129,900 Training Fees Earned 45,000 Utility Expense 6,400 Depreciation-exp Equipmt 13,200 Salary Expense 50,400 Rent Expense 36,000 Teach Supply Expense 5,200 Insurance Expense 2,400 Depr Expense Prof Library 7,200 Advertising Expense 6,000 Totals 344,200 344,200

Katys Cooking School Income statement December 31 201X Revenue 174,900 Expenses Utility Expense 6,400 Depreciation-Exp Equipmt 13,200 Salary Expense 50,400 Rent Expense 36,000 Teach Supply Expense 5,200 Insurance Expense 2,400 Depreciation-EXP Prof Library 7,200 Advertising Expense 6,000 Total Expenses 126,800 Net Income 48,100 Katys Cooking School Statement of Owners Equity December 31 201X Statement of owner equity Beginning Equity 90,000 + Net Income 48,100

- Draw 50,000 Ending equity 88,100 Katys Cooking School Balance Sheet December 31 201X Assets Buildings 17,800 Cash 34,000 Accounts Receivable 6,000 Teaching Supplies 2,800 PPD Insurance 9,600 Equipment 51,800 Net equipment 51,800 Total Assets 122,000 Liabilities Salaries Payable 400 Accounts Payable 26,000 Unearned Income 7,500 Total Liabilities 33,900 EQUITY Equity 88,100

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