Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

The following is the unadjusted trial balance for Fuller Institute, as of the end of its 2012 fiscal year, The institute provides tutoring to individuals

image text in transcribed
image text in transcribed
The following is the unadjusted trial balance for Fuller Institute, as of the end of its 2012 fiscal year, The institute provides tutoring to individuals who pary tuition directly to the business. Additional data at June 30, 2012: a) An inventory count shows that teaching supplies costing $6,000 are on hand at June 30,2012. b) Rent was paid on April 1, 2012 for the 6-months to September 30, 2012. c) The computer equipment was acquired on March 1,2012 and is being depreciated over 5 years on the straight-line method of depreciation, down to a residue of $30,000. d) The long-term note payable bears interest of 10% per year. The unadjusted Interest Expense account equals to the amount accrued for the first three quarters of the 2012 fiseal year. The accrued interest for the last quarter has not yet becen paid nor recorded. e) A premium of $48,000 for a one-year insurance policy was paid on February 1, 2012 f) On June 1, 2012 the Institute agreed to offer a special four-month course (starting immediately). The contract calls for a $7,500 monthly fee. Two clients paid the first two months fees in advance. When the cash was received, the Unearned Tuition Fees was credited g) Employees earned \$5,000 of unpaid and unrecorded salaries as of June 30, 2012. h) Accrued but unrecorded and uncollected tuition fees earned total $25,000. Other information: Note that the business is expected to make a $30,000 payment toward the note payable during the 2013 fiscal year. Required: i) Prepare the necessary year-end adjusting journal entries for Fuller Institute on June 30,2012 . [Narrations are not required] ii) Pill in the adjustments and adjusted trial balance columns in the Partial Work Sheet provided, (identifying each adjustment by letter). iii) From the adjusted trial balance prepared in part (ii) above, prepare an income statement and a statement of owner's equity for the year ended June 30,2012 and a classified balance sheet as at that date. [List expenses in decreasing order of their amount, starting with the largest] iv) Calculate Fuller's current ratio and debt ratio at Jume 30,2012 . Explain what these two ratios measure and whether it is usually preferable to have a higher or lower ratio for each

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Internal Auditing Principles And Techniques

Authors: Richard L. Ratliff, W. Wallace, Walter B. Mcfarland, J. Loeboecke

2nd Edition

0894133268, 978-0894133268

More Books

Students also viewed these Accounting questions

Question

Discuss global compensation practices.

Answered: 1 week ago

Question

Summarize global staffing practices.

Answered: 1 week ago

Question

Discuss the evolution of global business.

Answered: 1 week ago