Golf Academy, Inc., provides private golf lessons. Its unadjusted trial balance at December 31, 2012, follows, along

Question:

Golf Academy, Inc., provides private golf lessons. Its unadjusted trial balance at December 31, 2012, follows, along with information about selected accounts.

Further Information
As reported on December 31 bank statement. Based on count, only $200 of supplies still exist. Of this amount, $3,000 was received for December lessons and $500 for January lessons.
Employees were paid $1,000 for 10 days of work through December 28. They have not yet been paid for work on December 29 and 30.
The company has paid last year's income tax but not this year's tax.
The company has not paid the $100 of interest owed on its note payable for the current period.
This one-year note was taken out this year on December 1.
This amount was contributed to the company in prior years.
This is the balance reported at the end of last year.
Most customers pay cash for lessons each time they are provided, but some customers pay in advance.
Employees worked through December 30, but did not work on December 31.
This is the cost of supplies used through November 30.
The company has not paid the $100 of interest owed on its note payable for the current period.
The company has an average tax rate of 30%.
Required:
1. Calculate the (preliminary) unadjusted net income for the year ended December 31, 2012.
2. Name the five pairs of balance sheet and income statement accounts that require adjustment.
3. Calculate the desired balances for each account listed in the unadjusted trial balance.
4. Prepare the adjusting journal entries that are required at December 31, 2012.
5. Calculate the adjusted net income that the company should report for the year ended December 31, 2012. By how much did the adjustments in requirement (4) cause net income to increase or decrease?

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...