Collins Technical Institute (CTI), a school owned by Carolyn Collins, provides training to individuals who pay tuition directly to the school. CTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, is found on the trial balance tab. CTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31. a. An analysis of CTI's insurance policies shows that $2.700 of coverage has expired. b. An inventory count shows that teaching supplies costing $3.760 are available at year-end. c. Annual depreciation on the equipment is $4,800. d. Annual depreciation on the professional library is $9,000. e. On September 1, CTI agreed to do five courses for a client for $3,200 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $16,000 cash in advance for all five courses on September 1, and CTI credited Unearned Training Fees. f. On October 15, CTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $9.000 of the tuition has been earned by CTI. g. CTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $180 per day for each employee. h. The balance in the Prepaid Rent account represents rent for December. * Answer is not complete. Requirement General General Impact on Journal Trial Balance Income St Owner Ledger Statement Equity Balance Sheet income For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the drop-down.) Show less A Adjusted Account affecting the: Impact on Adjusting entry related to: ncome statement Balance Sheet net income . Insurance Insurance expense Prepaid insurance (2.700) b. Teaching supplies Teaching supplies expense ( Teaching supplies (5.440) c. Depreciation - Depreciation expense - Accumulated depreciation equipment Equipment Equipment O (4.800) d. Depreciation - library Depreciation expense - Accumulated depreciation - Professional library Professional library O (9.000) e. Training fees Training fees eamed Unearned training fees 8.400 f. Tuition Tuition fees eamed Accounts receivable 9,000 9. Salaries Salaries expense Salaries payable O (720) h. Rent Rent expense Prepaid rent (3.800) Total impact on income due to adjustments 15 (10.860) Net income before adjustment 7.070 Net income after adjustments 6.210 Had the adjustments not been prepared, income would have been overstated by 19.32%
