PacRim Careers provides training to individuals who pay tuition 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:

1. An analysis of the companys policies shows that $1,270 of insurance coverage has expired.
2. An inventory shows that teaching supplies costing $470 are on hand at the end of the year.
3. The estimated annual depreciation on the equipment is $8,250
4. The estimated annual depreciation on the professional library is $4,590.
5. 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 $930, and the client paid the first five months' revenue in advance. When the cash was received, the Unearned Extension Revenue account was credited.
6. On October 15, the school agreed to teach a four-month class for an individual for $1,220 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.
7. The school's two employees are paid weekly. As of the end of the year, three days' wages have accrued at the rate of $130 per day for each employee.
8. The balance in the Prepaid Rent account represents the rent for three months: December, January, and February.

Part 2

Part 3. Is it ethical to ignore adjusting entries?

Y/N

PACRIM CAREERS Trial Balances December 31, 2020 Unadjusted Trial Balance Dr Cr. $ 18,200 Adjustments Dr. Cr. Adjusted Trial Balance Dr. Cr. 6,700 1,420 7,500 61,23 $ 13,360 99,000 33,690 2,630 6,500 Account Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation, professional library Equipment Accumulated depreciation, equipment Accounts payable Salaries payable Unearned extension revenue Karoo Ashevak, capital Karoo Ashevak, withdrawals Tuition revenue Extension revenue Depreciation expense, equipment Depreciation expense, professional library Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 231,000 93,699 200, 669 74,500 298,080 46,eee 14,200 11,460 $566, 620 $566,629 Required: 1. Prepare the necessary annual adjusting journal entries at December 31, 2020, based on (a) to (h) above. View transaction list Journal entry worksheet 1 2 3 4 5 6 7 8 Record the cost of insurance expired during the year. Nal Enledelil Delare ceais. Date General Journal Debit Credit Dec 31, 2020 Record entry Clear entry View general journal Analysh Component: 2 Complete the adjusted trial balance using the information in (a) through (h) above. PACRIM CAREERS Trial Balances December 31, 2020 Unadjusted Trial Balance Dr. Cr. Adjustments Dr. Cr. Adjusted Trial Balance Dr. Cr. Account 18,200 6,700 1.420 7,500 61,200 $ 18,360 99,000 33,000 2,600 0 6,500 Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation, professional library Equipment Accumulated depreciation, equipment Accounts payable Salaries payable Unearned extension revenue Karoo Ashevak, capital Karoo Ashevak, withdrawals Tuition revenue Extension revenue Depreciation expense, equipment Depreciation expense, professional library Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 231,000 93,000 200,660 74,500 0 0 208,000 0 46,000 0 14,200 11,400 $ 566,620 $ 566,620 $ 0 0 $ 0 $ 0 3. If the adjustments were not recorded, calculate the over- or understatement of income. Overstated by Understated by