Question 1 (100 marks) i-Boxing Club, a company provides individual and group boxing training courses to customers (the Company'). Customers can pay in advance for training course packages; others are billed after attending the training courses. The Company adjusts its accounts monthly and prepares closing entries annually on 31 December. Below is its unadjusted trial balance on 31 December 2021. Credit (S) Debit (S) 390,045 9,000 480 3,600 216,000 Account Title Cash Course fees receivable Prepaid insurance Supplies Equipment Accumulated depreciation: Equipment Interest payable Income taxes payable Unearned course fees 5% Notes payable Share capital ($3 per share) Retained earnings Courses fees earned Rent expense Salaries expense Maintenance expense Insurance expense Interest expense Depreciation expense: Equipment Supplies expense Income taxes expense 54,000 2,625 26,300 70,300 90,000 75,000 117,000 592,800 160,000 135,000 10,000 12,000 5,000 39,600 21,000 26,300 1,028,025 1,028,025 Information on adjusting entries: (1) In November, a customer paid for a course fee package in advance. On 29 December 2021, the customer completed a one-day training course of $800. (2) There was an unrecorded and unpaid salary of $7,500 earned by a trainer for December 2021. (3) The 5% 8-month note payable was made on 1 May 2021. The entire note plus all the accrued interest was due and paid on 31 December 2021. The adjusting and the payment entries in December were not recorded. (4) On 1 March 2021, the Company paid a full year fire insurance in advance and recorded it on the same date. (5) The Company entered a contract with Super Basketball Team on 30 December 2021 for providing boxing training courses to the team at a monthly course fee of $30,000. The course will start in February 2022. (6) Equipment was depreciated by straight-line method over an estimated useful life of 6 years with no residual value. (7) Supplies on hand on 31 December 2021 were $500. (8) The Company estimated that the income taxes expense for the entire year was $26,500, which to be paid next year (9) Accrued but unrecorded and uncollected course fees earned at 31 December 2021 amounted to $2,500. (10) On 31 December 2021, the Company declared a dividend of $0.5 per share and 70% was paid on the same day. The remaining balance will be paid on 18 January 2022. No entries were recorded. Required: (a) Prepare the necessary adjusting journal entries on 31 December 2021 so as to bring the financial records of the Company up-to-date. Use the account titles given in the Trial Balance or create new accounts where appropriate. Explanations are NOT required. If no adjusting entries are required, state "No entry" and name the accounting principle applied. (46 marks)
