Complete the adjusting entries, post them to the general ledger then prepare an adjusted trial balance and financial statements.
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.
Cash
Katys Cooking School
Unadjusted Trail balance
December 31 201X
Debit
Credit
34,000
Accounts receivable
Teaching supplies
8,000
Ppd Insurance
Ppd Rent
Prof Library
Accum Depr Lib
Equipment
12,000
3,000
35,000
10,000
80,000
Accum Drp Equip
Accounts Payable
15,000
26,000
Salaries payable
Unearned tn fees
Capital
Draw
Tuition fees earned
12,500
90,000
50,000
123,900
Training fees earned
Depr expense prof library
–
Depr expense equipment
Salary expense
Insurance expense
Rent expense
Teach supply expense
50,000
33,000
–
Advertising expense
Utilities expense
6,000
6,400
Totals
40,000
317,400
317,400
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
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
e 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.
f 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
g accrued at the rate of $100 per day for each employee.
h The balance in the Prepaid Rent account represents rent for December.
General Journal
a
b
c
d
e
Debit
Credit
f
g
h
Cash
Ref
accounts receivable
Debit
Credit
Balance
–
Teaching Supplies
Ref
Debit
Credit
Ref
Debit
Credit
Balance
–
Ppd Insurance
Balance
–
Ref
Balance
–
Ref
Debit
Credit
Balance
–
Ppd Rent
Ref
Debit
Credit
Equipment
Ref
Debit
Debit
Credit
Balance
–
Accum Depr Equipment
Credit
Balance
–
Prof. Library
Ref
Debit
Ref
Debit
Credit
Balance
–
Accum Depr Library
Credit
Balance
–
Ref
Debit
Credit
Balance
–
Salaries payable
Ref
Debit
Accounts Payable
Credit
Balance
Ref
Debit
Credit
Balance
–
–
–
–
Unearned Income
Ref
Debit
Capital/equity
Credit
Balance
12,500
Ref
Debit
Credit
12,500
5,000
90,000
7,500
Balance
90,000
90,000
90,000
90,000
Draw
Ref
Tuition and Fees earned
Debit
Credit
Balance
Ref
Debit
Credit
Balance
–
–
–
–
–
–
Training fees earned
Ref
Debit
Credit
Utility Expense
Balance
Ref
Debit
Credit
Balance
–
–
–
–
–
–
Depreciation exp – Equipmt
Ref
Debit
Credit
Salary Expense
Balance
Debit
Debit
Credit
Balance
–
–
–
–
–
–
Teach Supply Expense
Credit
Balance
Credit
Ref
Debit
Credit
Balance
–
–
–
–
–
–
–
–
Insurance expense
Ref
Debit
–
rent Expense
Ref
Ref
Depr Expense Prof Library
Balance
Ref
Debit
Credit
Balance
–
–
–
–
–
–
–
Advertising Expense
Ref
Debit
Credit
Balance
–
Adjusted Trail Balance
TRIAL BALANCE
Accounts
Adjusted
TB
DR
Totals
CR
–
–
Katys Cooking School
Income statement
December 31 201X
Revenue
Expenses
Total Expenses
Net Income
Katys Cooking School
Statement of Owners Equity
December 31 201X
Statement of owner equity
Beginning Equity
+
–
Ending equity
–
Katys Cooking School
Balance Sheet
December 31 201X
Assets
Net equipment
Total Assets
–
Liabilities
Total Liabilities
EQUITY
Equity
Total Liabilities and Equity
–
–
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