1. At the end of 2020, the company's general ledger indicated the following balances: Debits Credits Cash $ 67,000 Accounts Payable $ 36,000 Accounts receivable 35,500 Note payable 57,600 Equipment (net) 115,000 Common stock 25,000 Retained earnings 98,900 Total $ 217,500 $ 217,500 2. Tuition revenue in December 2020 was $71,000, and tuition revenue budgeted for January 2021 is $100,000. 3. 4. 5. 6. 7. 50 percent of tuition revenue is collected in the month earned, and 50 percent is collected in the subsequent month. The receivable balance at the end of 2020 reflects tuition earned in December 2020. Monthly expenses (excluding interest expense) are budgeted as follows: salaries, $55,000; rent, $5,000; depreciation on equipment, $8,000; utilities, $2,200; other, $880. Expenses are paid in the month incurred. Purchases of equipment are paid in the month after purchase. The $36,000 payable at the end of 2020 represents money owed for the purchase of computer equipment in December 2020. The company intends to purchase $50,000 of computer equipment in January 2021. The anticipated $8,000 per month of depreciation (see number 4) reflects the addition of $2,200 of monthly depreciation related to this purchase. The note is at 14 percent per annum and requires monthly interest payments of $672. The payments are made on the 20th of each month. The principal must be paid in February 2022. 8. The tax rate is 20 percent. SUPPORT Cash receipts Collection of December 2020 tuition Collection of January 2021 tuition Total cash receipts Cash disbursements Payment of salaries Payment of rent Payment of utilities get For January 2021 Payment of other expenses Payment of purchases of computer equipment Payment of interest on note Payment of taxes Total disbursements Excess/(deficiency) of disbursements over receipts Add Beginning cash balance Ending cash balance 6A $ LA 35,500 50,000 85,500 55,000 5,000 i 2,200 880 672 5,650 67,000