Department of Accounting ahu Bu Page 1 ACCOUNTING 1101-COMPREHENSIVE PROBLEM To be completed after Chapter 4) The Heights Fitness Club opened for business on January 1,202. Members can attend the chu for a monthly fee of 90]or a yeartyfee of [S900|The monthly fee must be paid ind The yearly fee can be paid in cash (members receive a 10% discount if they paythe full fee in advance or members can siem a yearly contract but pay monthly is also a one-day pass available for a fee of cash $75 $ 15 For all fees received, the Unearned Membership Fees account is initially credited and adjusted at the end of each month. When a member signs an annual contract, but wants to pay monthly, the club debits the Cash account fo r the initial amount received (the amount for the first month) and debits the Accounts Recevable account for the balance. Lockers can also be rented for long-term use. The monthly fee is All locker fees must be paid in cash. When the club receives locker fees, it initially credits the Unearned Locker Fees account, Adjustments for fees earned occur at the end of each month. Additional information: 1) The club prepares financial statements monthly; all adjustments are made monthly. 2) A one year liability Insurance policy was purchased on October 1, 20x5; the premium paid was 4,500 a) The building was purchased on January 1, 20x2. Original cost b) The health club equipment was purchased on September 1, 20x5. Original cost: $108.0 c) The office equipment was purchased on April 1, 20x4. Original cost 3) All assets are being depreciated on a straight-line basis. 324,000 20 Estimated useful life (in years): Estimated useful life (in years): Estimated useful life (in years): 27,000 4 There is an outstanding one-year note payable, dated November 1, 20x5; principal and interest will be due on November 1, 20x6. Principal amount of the note: Interest rate on the note (per year) Interest expense accrued and recorded at the end of November, 20x5: 100,000 12% $ 1,000 5) A complete chart of accounts used by the Heights Fitness Club appears on page 2 The trial balance dated November 30, 20x5 (on page 3) represents the at that date (i.e, this is the trial balance after all adjustments recorded and posted for the month of November, 20x5.) and closing entries have been