Following is data for Pitt-Vaughn Academy (PVA). Use the data below to answer each of the enumerated requirements. Pitt-Vaughn Academy (PVA), a school owned by Lily Pitt Vaughn, provides training to individuals who pay tuition directly to the school. PVA also offers training to groups in off-site locations. PVA initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31. Additional Information Items a. An analysis of PVA's insurance policies shows that $2,939 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,547 are available at year-end. C. Annual depreciation on the equipment is $11,756. d. Annual depreciation on the professional library is $5,878. e. On September 1, PVA agreed to do five courses for a client for $2.400 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 $12,000 cash in advance for all five courses on September 1, and PVA credited Unearned Training Fees. f. On October 15, PVA agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $8,450 of the tuition has been earned by PVA. 8. PVA's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee. h. The balance in the Prepaid Rent account represents rent for December PITT-VAUGHN ACADEMY Unadjusted Trial Balance December 31 Credit Debit 27,849 $ 10,710 16,068 2,143 32,133 $ 9,641 74,968 17,139 38,341 Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation--Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees L. Pitt-Vaughn, Capital L Pitt-Vaughn, Withdrawals Tuition fees earned Training fees earned Depreciation expense--Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 12,000 68,123 42,845 109,254 40,702 51,415 23,573 7.498 5,998 $ 295,200 $ 295,200 Required: 1. Prepare the required adjusting journal entries for items a through h. 2. Prepare the Adjusted Trial Balance 3. Prepare the Income Statement for the year end 4. Prepare the Statement of Owner's Equity for the year 5. Prepare the Balance Sheet as of December 31
