Martin Technical Institute MTI a school owned by Lindsey Martin provid


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Martin Technical Institute MTI a school owned by Lindsey Martin provides training to individuals who pay tuition directly to the school

Sale price $15.00 Regular price $30.00

Martin Technical Institute MTI a school owned by Lindsey Martin

provides training to individuals who pay tuition directly to the school. MTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, is found on the trial balance tab. MTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31.

-An analysis of MTI's insurance policies shows that $2,400 of coverage has expired.
-An inventory count shows that teaching supplies costing $3,240 are available at year-end.
-Annual depreciation on the equipment is $5,400.
-Annual depreciation on the professional library is $10,200.
-On September 1, MTI agreed to do five courses for a client for $2,600 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $13,000 cash in advance for all five courses on September 1, and MTI credited Unearned Training Fees.
-On October 15, MTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $9,500 of the tuition has been earned by MTI.
-MTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $220 per day for each employee.
-The balance in the Prepaid Rent account represents rent for December.

General Journal:
1 Insurance expense DB 2,400
Prepaid insurance CR 2,400
2 Teaching supplies expense DB 5,310
Teaching supplies CR 5,310
3 Depreciation expense - Equipment DB 5,400
Accumulated depreciation - Equipment CR 5,400
4 Depreciation expense - Professional library DB 10,200
Accumulated depreciation - Professional library CR 10,200
5 Unearned training fees DB 5,200
Training fees earned CD 5,200
6 Accounts receivable DB 9,500
Tuition fees earned CR 9,500
7 Salaries expense DB 880
Salaries payable CR 880
8 Rent expense DB 3,800
Prepaid rent CR 3,800


Adjusted Income Statement:
Year Ended December 31
Revenues
Tuition fees earned $136,500
Training fees earned 50,700
Total revenues $187,200


Expenses
Depreciation expense - Professional library 10,200
Depreciation expense - Equipment 5,400
Salaries expense 51,680
Insurance expense 2,400
Rent expense 45,600
Teaching supplies expense 5,310
Advertising expense 6,000
Utilities expense 6,950
Total expenses 133,540
Net income $53,660


Owner's Equity
For Year Ended December 31
L. Martin, Capital, December 31 prior year end $92,000
Add: Net income 53,660
Less: Withdrawals by owner (53,300)
L. Martin, Capital, December 31 current year end $92,360


Balance Sheet December 31
Assets
Current assets
Cash $54,900
Accounts receivable 9,500
Teaching supplies 3,240
Prepaid insurance 7,200
Prepaid rent 0
Total current assets$74,840
Plant assets $0
Accumulated depreciation - Professional library (30,600)
Accumulated depreciation - Equipment (16,200)
= (46,800)
Total assets $28,040
Liabilities
Current liabilities
Accounts payable $32,000
Salaries payable 880
Unearned training fees 7,800
Total liabilities $40,680
Equity
L. Martin, Capital 92,360
Total equity 92,360
Total Liabilities & Equity $133,040


Account affecting the:Impact on net income
Adjusting entry related to: Income statement Balance Sheet
a. Insurance Insurance expense Prepaid insurance $?
b. Teaching supplies Teaching supplies expense Teaching supplies $?
c. Depreciation - equipment Dep. expense - Equip Acc. depreciation - Equipment
d. Depreciation - library Dep. expense - library Acc. depreciation - library
e. Training fees Training fees earned Unearned training fees
f. Tuition Tuition fees earned
g. Salaries Salaries expense Salaries payable
h. Rent Rent expense Prepaid rent
Total impact on income due to adjustments $
Net income before adjustments
Net income after adjustments

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