Question
Adjusting entries . You have been retained to examine the records of Kathy's Day Care Center as of December 31, 20X3, the close of the
Adjusting entries. You have been retained to examine the records of Kathy's Day Care Center as of December 31, 20X3, the close of the current reporting period. In the course of your examination, you discover the following:
On January 1, 20X3, the Supplies account had a balance of $2,350. During the year, $5,520 worth of supplies was purchased, and a balance of $1,620 remained unused on December 31.
Unrecorded interest owed to the center totaled $300 as of December 31.
All clients pay tuition in advance, and their payments are credited to the Unearned Tuition Revenue account. The account was credited for $70,000 on August 31. With the exception of $15,500, which represented prepayments for 10 months' tuition from several well-to-do families, all amounts were for the current semester ending on December 31.
Depreciation on the school's van was $4000 for the year.
On August 1, the center began to pay rent in 6-month installments of $24,000. Kathy wrote a check to the owner of the building and recorded the check in Prepaid Rent, a new account.
Two salaried employees earn $500 each for a 5-day week. The employees are paid every Friday, and December 31 falls on a Thursday.
Kathy's Day Care paid insurance premiums as follows, each time debiting Prepaid Insurance:
Date Paid | Policy No. | Length of Policy | Amount |
Feb. 1, 20X2 | 1033MCM19 | 1 year | $600 |
Jan. 1, 20X3 | 7952789HP | 1 year | 1000 |
Aug. 1, 20X3 | XQ943675ST | 2 years | 840 |
Instructions The center's accounts were last adjusted on December 31, 20X2. Prepare the adjusting entries necessary under the accrual basis of accounting.
H 5 Copy of ACC205 Week Two Guidance Report Excel File Home Insert Page Layout Formulas Data Review view Tell me what you want to do D73 67 VIDEO Origina Account to Jan-Feb be changed Amount Unrecorded interest 69 300 70 Total Tuition in advance 0000 4000 71 Depreciation 72 Rent 24000 73 Salaries 500 74 Feb 1 20X2 600 75 Jan 1 20X3 1000 YOUR ANSWERS BASED UPON COURSE START DATE 78 Unrecorded interest owed to the center totaled $275 as of 79 December 31. 80 Interest Expense Interest Payable 81 All clients pay tuition in advance, and their payments are credited to the Unearned Tuition Revenue account. The account was credited for $75,500 on August 31 With the exception of $15, 500 which represented prepayments for 10 months tuition from several well-to-do families, all Amniint were fo the current Student Guidance Report Ready O Ask me anythingStep by Step Solution
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