Packim Careers provides training to Individuals who pay tultion directly to the business. The business also offers extension training to groups in off-site locations. Additional information available at the December 31, 2020, year-end follows: a. An analysis of the company's policies shows that $1,170 of insurance coverage has expired. b. An inventory shows that teaching supplies costing $370 are on hand at the end of the year. c. The estimated annual depreciation on the equipment is $7,000 d. The estimated annual depreciation on the professional library is $4,140. e. The school offers off-campus services for specific employers. On November 1, the company agreed to do a special six-month course for a client. The contract calls for a monthly fee of $770, and the client paid the first five months revenue in advance. When the cash was received, the Unearned Extension Revenue account was credited 1. On October 15, the school agreed to teach a four-month class for an individual for $1,120 tuition per month payable at the end of the class. The services to date have been provided as agreed, but no payment has been received. 9. The school's two employees are paid weekly. As of the end of the year, three days' wages have accrued at the rate of $120 per day for each employee. h. The balance in the Prepaid Rent account represents the rent for three months: December, January, and February Adjustments Dr. Cr. Adjusted Trial Balance Dr. Cr. PACRIN CAREERS Trial Balancen December 31, 2020 Unadjusted Trial Balance Account Dr. Ce. Cash $ 17,200 Accounts receivable 0 Teaching supplies 5,700 Prepaid insurance 1,320 Prepaid rent 6,000 Professional library 55,200 Accumulated depreciation, professional library $ 16,560 Equipment 84,000 Accumulated depreciation, equipment 28,000 Accounts payable 2,100 Salarionbla for each employee h. The balance in the Prepaid Rent account represents the rent for three months: December, January, and February. Adjustments Dr. Cr. Adjusted Trial Balance Dr. CE PACRIM CAREERS Trial Balances December 31, 2020 Unadjusted Trial Balance Account Dr. CE. Cash $ 17,200 Accounts receivable 0 Teaching supplies 5,700 Prepaid Insurance 1,320 Prepaid rent 6,000 Professional Library 55,200 Accumulated depreciation, professional library $ 16,560 Equipment 84,000 Accumulated depreciation, equipment 28,000 Accounts payable 2,100 Salaries payable 0 Unearned extension revenue 5,500 Karoo Ashevak, capital 221,000 Karoo Ashevak, withdrawals 88,000 Tuition revenue 177,360 Extension revenue 64,500 Depreciation expense, equipment Depreciation expense, professional Library Salaries expense 198,000 Insurance expense 0 Rent expense 36,000 Teaching supplies expense 0 Advertising expense 13,200 Utilities expense 10,400 Totala $515,020 $515,020 $515,020 $515,020 Totals ed Required: 1. Prepare the necessary annual adjusting journal entries at December 31, 2020, based on (a) to (h) above. View transaction list X 1 Record the cost of insurance expired during the year. CS 2 Record the cost of supplies used during the year. 3 Record the equipment depreciation expense. 4 Record the professional library depreciation expense. 5 Record the entry to adjust the unearned extensioning revenue account. Credit 6 Record the amount of tuition revenue earned. 7 Record the accrued salaries expense. 8 Record the expiration of prepaid rent. Journal entry has been entered Note : Record entry Clear entry View general journal Analysis Component: 2. Complete the adjusted trial balance using the information in (a) through (h) above. Adjustments Dr. Cr. Adjusted Trial Balance Dr. Cr. Account Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation, professional library Equipment Accumulated depreciation, equipment Accounts payable Salaries payable Uneamed extension revenue Karoo Ashevak, capital Kordo Ashevak, withdrawals Tuition revenue Extension revenue Depreciation expenso, equipment Depreciation expense, professional library Salaries expense Insurance expenso Rent expense Teaching supplies expense Advertising expense Utilities expense Totals PACRUM CAREERS Trial Balance December 31, 2020 Unadjusted Trial Balance Dr Cr. $ 17200 0 5,700 1,320 6,000 56,200 $ 16,560 B4,000 28,000 2,100 0 5,500 221,000 88,000 177,360 84,500 0 0 198,000 0 36,000 0 13,200 10,400 $ 515,020 $ 515,020 $ 0$ os 0 $ 0 3. If the adjustments were not recorded, calculate the over- or understatement of income. 4. Is it ethical to ignore adjusting entries? Yes No
