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QUESTION 2 (19 marks) Beauty Fitness Company adjusts its account monthly, and the company's financial year end is on 31 December each year. The unadjusted

QUESTION 2 (19 marks) Beauty Fitness Company adjusts its account monthly, and the company's financial year end is on 31 December each year. The unadjusted trial balance at 31 January 2023 before adjustments was as follows: Cash Accounts Receivable Supplies Interest Receivable Prepaid Advertising Equipment Accumulated Depreciation - Equipment Unearned Training Fees Share Capital Retained Earnings Training Fees Earned Interest Revenue Earned Notes Payable Interest Payable Salary Expense Advertising Expense Utilities Expense Rent Expense Interest Expense Debit $ 134,900 21,000 4,150 850 4,200 72,000 80,300 4,500 6,800 122,500 3,960 $455,160 Credit $ 24,000 36,800 40,000 81,550 250,330 1,280 20,000 1,200 $455,160 The following information relates to month end adjustments: (i) Training fees received in advance that were earned in January totaled $10,500. (ii) On 1 November 2022, the company paid in advance for 6 months' advertising in professional magazines. (iii) On 31 January, supplies on hand was $1,200. (iv) The annual depreciation expense for the equipment was $24,000. (v) Accrued interest on the outstanding Notes Payable at 31 January was $320. No interest expense has yet been recorded. (vi) Interest revenue not recorded for the month of January was $1,900. You are required to prepare (Explanation for each journal entry is NOT required) (a) the adjusting entries required on 31 January 2023; and (12 marks) (b) an Income Statement, which included the effects of adjusting entries performed in part a, for the month of January 2023. (7 marks) Mid-term Test - Question (A) 6
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Beauty Fitness Company adjusts its account monthly, and the company's financial year end is on 31 December each year. The unadjusted trial balance at 31 January 2023 before adjustments was as follows: The following information relates to month end adjustments: (i) Training fees received in advance that were earned in January totaled $10,500. (ii) On 1 November 2022, the company paid in advance for 6 months' advertising in professional magazines. (iii) On 31 January, supplies on hand was $1,200. (iv) The annual depreciation expense for the equipment was $24,000. (v) Accrued interest on the outstanding Notes Payable at 31 January was $320. No interest expense has yet been recorded. (vi) Interest revenue not recorded for the month of January was $1,900. You are required to prepare (Explanation for each journal entry is NOT required) (a) the adjusting entries required on 31 January 2023; and (12 marks) (b) an Income Statement, which included the effects of adjusting entries performed in part a, for the month of January 2023. (7 marks) Mid-term Test - Question (A) 6

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