Question
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:
- Analysis of the companys policies shows $5,400 of insurance coverage expired.
- A physical count shows surfing supplies of $777 remaining at the end of the year.
- 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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