Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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
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.
- An analysis of CTIs insurance policies shows that $2,700 of coverage has expired.
- An inventory count shows that teaching supplies costing $3,760 are available at year-end.
- Annual depreciation on the equipment is $4,800.
- Annual depreciation on the professional library is $9,000.
- 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.
- 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.
- CTIs 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.
- The balance in the Prepaid Rent account represents rent for December.
Need assistance with Net income before adjustments & Net income after adjustments
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 Impact on net income $ (2,700) (5,440) (4.800) Adjusted Account affecting the: Adjusting entry related to: Income statement Balance Sheet a. Insurance Insurance expense Prepaid insurance b. Teaching supplies Teaching supplies expense Teaching supplies c. Depreciation - Depreciation expense - Accumulated depreciation - equipment Equipment Equipment Depreciation expense Accumulated depreciation - d. Depreciation - library Professional library Professional library e. Training fees Training fees earned Unearned training fees f. Tuition Tuition fees earned Accounts receivable g. Salaries Salaries expense Salaries payable h. Rent Rent expense Prepaid rent Total impact on income due to adjustments Net income before adjustments Net income after adjustments Had the adjustments not been prepared, income would have been overstated by (9,000) 6,400 e|ee|9|8 lol lolololol 9,000 (720) (3,600) $ (10,860) 67,070 X 56,210 19.32% $ 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 Impact on net income $ (2,700) (5,440) (4.800) Adjusted Account affecting the: Adjusting entry related to: Income statement Balance Sheet a. Insurance Insurance expense Prepaid insurance b. Teaching supplies Teaching supplies expense Teaching supplies c. Depreciation - Depreciation expense - Accumulated depreciation - equipment Equipment Equipment Depreciation expense Accumulated depreciation - d. Depreciation - library Professional library Professional library e. Training fees Training fees earned Unearned training fees f. Tuition Tuition fees earned Accounts receivable g. Salaries Salaries expense Salaries payable h. Rent Rent expense Prepaid rent Total impact on income due to adjustments Net income before adjustments Net income after adjustments Had the adjustments not been prepared, income would have been overstated by (9,000) 6,400 e|ee|9|8 lol lolololol 9,000 (720) (3,600) $ (10,860) 67,070 X 56,210 19.32% $Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started