Other Information

1. Accrued but unrecorded tuition revenue earned as of December 31, 2019 is $3,000.
2. According to the records, $750 of cash receipts originally recorded as unearned tuition had been earned as of December 31.
3. The company purchased a 12 months insurance policy on August 1, 2019 for $4,080.
4. On October 1, 2019, the company paid $7,650 for rent through March 31, 2020.
5. Based on a count taken at December 31, tuition supplies on hand amount to $220.
6. The classroom equipment was acquired when the business was first formed. Its estimated useful life at that time was five years (or 60 months).
7. On November 1, 2019 the company borrowed $4,250 by signing a three months note payable with an annual interest rate of 6%. The entire note, plus three months accrued interest is due on February 1, 2020.
8. Accrued but unrecorded salaries at December 31 are $2,700.
9. Estimated income taxes expense for entire year totals $18,000. Taxes are due in the first quarter of 2020.
10. A cash payment of advertising expense for $520 was recorded as a debit to Utilities expense $250 and a credit to Cash $250.

Instructions:

Where necessary, you may round your answer to the nearest whole number.

a. Prepare the necessary adjusting/correcting entry for (1) to (10). Omit explanation. (20 marks)

b. Prepare BrightStar Academys adjusted trial balance for December 31, 2019. (14 marks)

c. Prepare BrightStar Academys Income Statement for December 31, 2019. (5 marks)

d. Prepare BrightStar Academys Retained Earnings Statement for December 31, 2019. (2 marks)

e. Prepare BrightStar Academys Statement of Financial Position for December 31, 2019. (10 marks)

f. Prepare the necessary year-end closing entries for BrightStar Academy. (8 marks)

g. BrightStar Academys unadjusted trial balance reports dividends of $1,000. As of December 31, 2019, have these dividends been paid? Briefly explain. (1 marks)

Question 4 BrightStar Academy runs an institute for tuition services. The Academy also provides home tuition services. It is the policy of the Academy to record adjusting entries on a monthly basis. BrightStar Academy's fiscal year end is December 31, 2019. The unadjusted trial balance dated December 31, 2019 is given below (this reflects the adjusting entries up until November 30, 2019, but not for December). BrightStar Academy Unadjusted Trial Balance December 31, 2019 $ 13,430 1,785 2,720 5,100 383 153,000 Cash Accounts Receivable Unexpired Insurance Prepaid Rent Tuition supplies Classroom Equipment Accumulated depreciation: Classroom Equipment Account Payable Notes Payable Dividends Payable Interest Payable Income Taxes Payable Unearned Tuition Revenue Share Capital - Ordinary Retained Earnings Dividends Tuition Revenue Earned Advertising Expense Insurance Expense Rent Expense Tuition Supplies Expense Utilities Expense Depreciation Expense: Classroom Equipment Salaries Expense Interest Expense Income Taxes Expense 61,200 2,975 4,250 850 21 2.890 935 17,000 48,110 850 131,219 6,290 3,740 14,025 663 4,250 28,050 23,375 21 11,768 269,450 269,450