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BigWaveDave Surf School provides surfing lessons to individuals in Tofino, BC and also offers Certified Surfing Instructor Training to groups and individuals in other off-site

BigWaveDave Surf School provides surfing lessons to individuals in Tofino, BC and also offers Certified Surfing Instructor Training to groups and individuals in other off-site locations. The business follows the practice of initially recording Prepaid Expenses and Unearned Revenues in balance sheet accounts (eg. prepaid asset or unearned liability). Following is the unadjusted trial balance. BigWaveDave only does accounting once per year at year end.

BigWaveDave Surf School (a proprietorship)

Unadjusted Trial Balance

December 31, 2018

ACCOUNT

DEBIT

CREDIT

Cash

$ 3,100

Accounts receivable

4,800

Surfing supplies

2,900

Prepaid advertising

1,950

Prepaid insurance

5,600

Surf equipment (Sea-doos)

21,300

Accumulated amortization - Surf equipment

$ 13,160

Vehicles (GM Pick-up truck)

49,000

Accumulated amortization Truck

27,450

Accounts payable

6,775

Salaries payable

1,500

Unearned fees

5,200

Dave Slater, capital

20,353

Fee revenue

36,050

Advertising expense

5,985

Amortization expense Surf equipment

0

Amortization expense Truck

0

Insurance expense

200

Surfing supplies expense

2,000

Salary expense

13,653

Total

$110,488

$110,488

Additional information related to fiscal year 2018 but not made available until January 5, 2019, a few days after the above unadjusted trial balance was prepared, is as follows:

  1. Analysis of the companys policies shows $5,400 of insurance coverage expired.

  1. A physical count shows surfing supplies of $777 remaining at the end of the year.

  1. The estimated annual amortization on the Sea-doos (surf equipment) is $4,500 and on the pick-up truck (vehicle) is $7,000.

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