Golf Academy, Inc., provides private golf lessons. Its unadjusted trial balance at December 31, 2018, follows, along
Question:
Golf Academy, Inc., provides private golf lessons. Its unadjusted trial balance at December 31, 2018, follows, along with information about selected accounts.
Required:
1. Calculate the (preliminary) unadjusted net income for the year ended December 31, 2018.
2. Name the five pairs of balance sheet and income statement accounts that require adjustment and indicate the amount of adjustment for each pair.
3. Prepare the adjusting journal entries that are required at December 31, 2018.
4. Calculate the adjusted net income that the company should report for the year ended December 31, 2018. By what dollar amount did the adjustments in requirement 3 cause net income to increase or decrease?
Account Names Debit Credit Further Information Cash $31,900 As reported on December 31 bank statement. Supplies 600 Based on count, only $200 of supplies still exist. Deferred Revenue $ 3,500 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. Salaries and Wages Payable Income Tax Payable Interest Payable 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 notes payable for the current period. Notes Payable (long-term) 12,000 This one-year note was taken out this year on December 1. Common Stock 1,000 This amount was contributed for common stock in prior years. Retained Earnings 3,000 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. Service Revenue 51,500 Salarles and Wages Expense 36,100 Employees worked through December 30, but did not work on December 31. Supplies Expense 2,400 This is the cost of supplies used through November 30. Interest Expense The company has not paid the $100 of interest owed on its notes payable for the current period. Income Tax Expense The company has an average tax rate of 30%. Totals $71,000 $71,000
Step by Step Answer:
Execusmart Consultants has provided business consulting services for several years The company has b...View the full answer
Fundamentals Of Financial Accounting
ISBN: 9781265440169
7th Edition
Authors: Fred Phillips, Shana Clor Proell, Robert Libby, Patricia Libby
Related Video
Days payable outstanding is an efficiency ratio that measures the average number of days a company takes to pay its suppliers. The video shows how to effectively calculate days Payable outstanding.
Students also viewed these Business questions
-
The net income for the year ended December 31, 2015, for Oliva Company was $1,900,000. Additional information is as follows: Depreciation on plant...
-
Prepare the adjusting journal entries that Frederick Clinic must record as a result of preparing the bank reconciliation in Exercise 8-9.
-
Prepare the adjusting journal entries that Del Gato Clinic must record as a result of preparing the bank reconciliation in Exercise 8- 10. In Exercise 8- 10, Del Gato Clinic deposits all cash...
-
Determine the breakeven point for each plant. Hambry Enterprises produces a component for recycling uranium used as a nuclear fuel in power plant generators in France and the United States. Use the...
-
A piston/cylinder has 5 m of liquid 20oC water on top of the piston (m = 0) with cross-sectional area of 0.1 m2, see Fig. P2.57. Air is let in under the piston that rises and pushes the water out...
-
Argile Textiles is evaluating a new product, a silk/wool blended fabric. Assume that you were recently hired as assistant to the director of capital budgeting, and you must evaluate the proposed...
-
(a) A feather and a brick are falling freely in an evacuated tube. Is the magnitude of the gravitational force exerted by Earth on the feather larger than, smaller than, or equal to that exerted by...
-
Kelly's Tavern serves Shamrock draft beer to its customers. The daily demand for beer is normally distributed, with an average of 20 gallons and a standard deviation of 4 gallons. The lead time...
-
15 16 17 18 In 1987, an agreement was formulated by the United Nations Environment Programme (UNEP) to freeze the production of "X" to prevent depletion of "Y". "X" and "Y" respectively referred here...
-
A Global private bank is aggressively looking to leverage technology to improve customer experience and reduce operational costs. Over the last few years, it has tied up with at least five startups...
-
When a concert promotions company collects cash for ticket sales two months in advance of the show date, which of the following accounts is affected? a. Accounts Payable b. Accounts Receivable c....
-
Learn to Play, Inc., is a one-person company that provides private piano lessons. Its unadjusted trial balance at December 31, 2018, follows, along with information about selected accounts. Required:...
-
Perform the indicated multiplications. 5(y 3)(y + 6)
-
Question: How and why did piracy affect European empires in the Atlantic world from the late sixteenth to the early eighteenth centuries? - In your response, you might like to consider the role of...
-
What is the background, facts and conclusions, comments from the judge about this case? A brief summary with facts. Simpsons limited v canadian union of brewery, flour, Cereal, Soft Drink and...
-
Consider a U.S. Corporate bond that pays semi-annual coupons with settlement of May 12, 2018. The bond matures on March 1, 2046. The bond's coupon rate is 3% and has a yield of 3%. What is the bond's...
-
The Quarantine Corporation began operations in March 2024. The following is a condensed balance sheet as of March 31, 2024. The owners did not take any distributions from the business in March. Cash...
-
An amount of AED 24900 is deposited to a savings account for 50 weeks at a simple interest rate of 3.1% per annum. How much interest did your money earn at the end of the period
-
(a) Suppose that a function f (z) is continuous on a smooth arc C, which has a parametric representation z = z(t) (a ¤ t ¤ b); that is, f [z(t)] is continuous on the interval a ¤...
-
Assume today is the 21st of February. Using the information below, FT Extract, answer the following questions (parts i and ii). You work for a US company that is due to receive 250 million in June...
-
The following accounts are taken from the financial statements of Facebook Inc. at September 30, 2013. (Amounts are in millions.) Accounts Payable.. $ 700 Cash... 3,100 Common Stock 10,400 Equipment....
-
The balance sheet of Mister Ribs Restaurant reports current assets of $ 30,000 and current liabilities of $ 15,000. Calculate and interpret the current ratio. Does it appear likely that Mister Ribs...
-
Refer to M2- 23. Evaluate whether the current ratio of Mister Ribs Restaurant will increase or decrease as a result of the following transactions. Consider each item, (a)-( d), independent of the...
-
n Juods xi(yi - Bxi) = 0 n i=1 a) Step by step, solve for B (Hint: you may want to use the proof starting on pg 10 as your guide)
-
Problem 1: JIT Setup Cost and Time Suppose that Roger, a production manager, is trying to run JIT. The product Annual Demand is 300,000 units, with 250 working days in a year, which means daily...
-
Explain bank runs. Discuss the measures that the U.S. took to address the bank runs of the Great Depression, and the implications of those actions.
Study smarter with the SolutionInn App