4 ts ebook Ask Print Problem 3-6A Adjusting entries (annual); adjusted trial balance LO4, 6 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: a. An analysis of the company's policies shows that $1,150 of insurance coverage has expired. b. An inventory shows that teaching supplies costing $350 are on hand at the end of the year. c. The estimated annual depreciation on the equipment is $6,750 d. The estimated annual depreciation on the professional library is $4,050. 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 $750, and the client paid the first five months' revenue in advance. When the cash was received, the Unearned Extension Revenue account was credited. f. On October 15, the school agreed to teach a four-month class for an individual for $1,100 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. g. 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. h. The balance in the Prepaid Rent account represents the rent for three months: December, January, and February. PACRIM CAREERS Trial Balances Adjusted Trial Balance Cr. Dr. Cr. Account Cash December 31, 2020 Unadjusted Trial Balance Dr. $17,000 Adjustments Cr. Dr. Accounts receivable e Teaching supplies 5,500 Prepaid insurance 1,300 Prepaid rent 5,700 Professional library 54,000 Accumulated depreciation, professional library $ 16,200 Equipment 81,000 Accumulated depreciation, equipment Accounts payable. Salaries payable Karoo Ashevak, capital 27,000 2,000 0 Unearned extension revenue 5,300 219,000 Karoo Ashevak, withdrawals 87,000 Tuition revenue 172,700 Extension revenue 62,500 Depreciation expense, equipment 0 Depreciation expense, professional library 0 Salaries expense 196,000 Insurance expense Rent expense 34,000 Teaching supplies expense Advertising expense 13,000 Utilities expense 10,200 Totals $504,700 $504,700 25 4 Required: 1. Prepare the necessary annual adjusting journal entries at December 31, 2020, based on (a) to (h) above. points eBook Ask Print View transaction list Journal entry worksheet < 1 2 3 4 5 6 7 8 Record the cost of insurance expired during the year. Note: Enter debits before credits. Date Dec 31, 2020 General Journal Debit Credit Record entry Clear entry View general journal Connect Assignment PACRIM CAREERS Trial Balances December 31, 2020 Unadjusted Trial Balance Saved Adjustments Account Dr. Cr Dr. Cr Dr. Cash $ 17,000 Accounts receivable 0 Teaching supplies 5,500 Prepaid insurance 1,300 Prepaid rent 5,700 Professional library 54,000 Accumulated depreciation, professional library $ 16,200 Equipment 81,000 Accumulated depreciation, equipment 27,000 Accounts payable 2,000 Salaries payable 0 Unearned extension revenue 5,300 Karoo Ashevak, capital 219,000 Karoo Ashevak, withdrawals 87,000 Tuition revenue 172,700 Extension revenue 62,500 Depreciation expense, equipment Depreciation expense, professional library. Salaries expense 0 0 196,000 Adjusted Trial Balance Cr Prepaid insurance Prepaid rent Professional library Accumulated depreciation, professional library 1,300 5,700 54,000 $ 16,200 81,000 Equipment Accumulated depreciation, equipment Accounts payable Salaries payable Unearned extension revenue Karoo Ashevak, capital Karoo Ashevak, withdrawals Tuition revenue Extension revenue 27,000 2,000 0 5,300 219,000 87,000 172,700 62,500 Depreciation expense, equipment 0 Depreciation expense, professional library 0 Salaries expense 196,000 Insurance expense Rent expense 0 34,000 0 Teaching supplies expense Advertising expense Utilities expense Totals 13,000 10,200 $ 504,700 $ 504,700 Saved 25 4 points 3. If the adjustments were not recorded, calculate the over- or understatement of income. eBook Ask Print 4. Is it ethical to ignore adjusting entries? O Yes O No.