Question
Brown Technical Institute (BTI), a school owned by Paul Brown, provides training to individuals who pay tuition directly to the school. BTI also offers training
Brown Technical Institute (BTI), a school owned by Paul Brown, provides training to individuals who pay tuition directly to the school. BTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2022, is found on the trial balance tab. BTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31 follow. An analysis of BTIs insurance policies shows that $2,450 of coverage has expired. An inventory count shows that teaching supplies costing $2,840 are available at year-end. Annual depreciation on the equipment is $8,200. Annual depreciation on the professional library is $9,400. On November 1, BTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,600, and the client paid the first five months fees in advance. When the cash was received, the Unearned Training Fees account was credited. On October 15, BTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $3,200 of the tuition has been earned by BTI. BTIs two employees are paid weekly. As of the end of the year, two days salaries have accrued at the rate of $120 per day for each employee. The balance in the Prepaid Rent account represents rent for December.
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