After five years of operations, Svenson?s Tutoring Clinic showed the following post-closing balances at December 31, 2019.

Required

Analysis Component:

a. Explain why Leda Svenson, Withdrawals, Tutoring Revenue, Rent Expense, Depreciation Expense, and Advertising Expense have zero balances. Preparation Component:

b. Journalize and post the following transactions that occurred during 2020.

Jan 15 Provided $8,000 of tutoring services on account.

Feb. 20 Paid $2,000 for advertising that appeared in today?s newspaper.

Jul. 7 Collected $9,000 from credit customers.

Dec. 10 The owner withdrew $3,000 cash for personal use.

c. Prepare an unadjusted trial balance as at December 31, 2020.

d. Journalize and post the adjusting entries on December 31, 2020, based on the following additional information:

? Annual depreciation on the office equipment is $2,000.

? $2,400 of the balance in unearned revenue has been earned.

? The entire balance in prepaid rent has expired.

e. Prepare an adjusted trial balance at December 31, 2020.

f. Prepare an income statement, statement of changes in equity, and classified balance sheet.

g. Journalize and post the closing entries.

h. Prepare a post-closing trial balance.

Transcribed Image Text:

Accounts Receivable 5,000 Prepaid Rent Office Equipment Cash 2,000 3,000 20,000 Leda Svenson, Capital 17,100 Accumulated Depreciation, Office Equipment Leda Svenson, Withdrawals Unearned Revenue 10,000 2,900 -0- Depreciation Expense Tutoring Revenue Rent Advertising Expense Expense -0- -0- -0- -0-