Funky Vibes provides music lessons to student musicians. Some students pay in advance for lessons; others...

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Funky Vibes provides music lessons to student musicians. Some students pay in advance for lessons; others are billed after lessons have been provided. Advance payments are credited to an account entitled Unearned Lessons revenue. Adjusting entries are performed monthly and closing annually on December 31. An adjusted trial balance dated December 31, 2020, is provided below. FUNKY VIBES UNADJUSTED TRIAL BALANCE DECEMBER 31, 2020 Cash $ 15,800 Accounts receivable. 2,100 Unexpired insurance. 3,200 Prepaid rent 6,000 Sheet music supplies 450 Music equipment. 180,000 Accumulated depreciation: music equipme Accounts payable Notes payable. Dividends payable Interest payable Income taxes payable Unearned lesson revenue Capital stock. Retained earnings Dividends Lesson revenue eamed Advertising expense Insurance expense Rent expense. Sheet music supples expense. Uslities expense Depreciation expense: music equipmen Salaries expense Interest expense. Income taxes expense. $72,000 3.500 5,000 1,000 25 3,400 1,100 20,000 56,600 154,375 1,000 7,400 4,400 16,500 780 5,000 33,000 27.500 25 13,845 $317.000 $317,000 Data for adjustments: 1.Lessons revenue earned but not yet recorded as of December 31, 2020, amounts to $33,200. 2. Records show that $700 of cash receipts originally recorded as uneamed revenue had been earned as of December 31. 3. The company purchased a 12-month insurance policy on August 1, 2020, for $4,800. On December 1, 2020, the company paid $9,000 for rent to cover the next 6 months. s. Sheet music supplies consumed during december total $200. 6 All music equipment was purchased when the business was first formed. Its estimated life at that time was six years (72 months). 7.On November 1, 2020, the company borrowed $5,000 by signing a three-month, 6% note payable. The entire note, plus three months' interest is due on February 1, 2021. * Salaries earned by the employees and not yet recorder or paid at December 31 amount to $4,500. Instructions: 1. Prepare the necessary adjusting journal entries on December 31, 2020.(32 points) 2. Post entries on the ledger accounts (T-accounts).(16 points) xPrepare the necessary year-end closing entries and post them in the ledger accounts.(12 points) Prepare an income statement for the year ended December 31, 2020. (10 points) xPrepare a statement of retained earnings for the year ended December 31, 2020. (10 points) Prepare a balance sheet dated December 31, 2020.(20 points) Funky Vibes provides music lessons to student musicians. Some students pay in advance for lessons; others are billed after lessons have been provided. Advance payments are credited to an account entitled Unearned Lessons revenue. Adjusting entries are performed monthly and closing annually on December 31. An adjusted trial balance dated December 31, 2020, is provided below. FUNKY VIBES UNADJUSTED TRIAL BALANCE DECEMBER 31, 2020 Cash $ 15,800 Accounts receivable. 2,100 Unexpired insurance. 3,200 Prepaid rent 6,000 Sheet music supplies 450 Music equipment. 180,000 Accumulated depreciation: music equipme Accounts payable Notes payable. Dividends payable Interest payable Income taxes payable Unearned lesson revenue Capital stock. Retained earnings Dividends Lesson revenue eamed Advertising expense Insurance expense Rent expense. Sheet music supples expense. Uslities expense Depreciation expense: music equipmen Salaries expense Interest expense. Income taxes expense. $72,000 3.500 5,000 1,000 25 3,400 1,100 20,000 56,600 154,375 1,000 7,400 4,400 16,500 780 5,000 33,000 27.500 25 13,845 $317.000 $317,000 Data for adjustments: 1.Lessons revenue earned but not yet recorded as of December 31, 2020, amounts to $33,200. 2. Records show that $700 of cash receipts originally recorded as uneamed revenue had been earned as of December 31. 3. The company purchased a 12-month insurance policy on August 1, 2020, for $4,800. On December 1, 2020, the company paid $9,000 for rent to cover the next 6 months. s. Sheet music supplies consumed during december total $200. 6 All music equipment was purchased when the business was first formed. Its estimated life at that time was six years (72 months). 7.On November 1, 2020, the company borrowed $5,000 by signing a three-month, 6% note payable. The entire note, plus three months' interest is due on February 1, 2021. * Salaries earned by the employees and not yet recorder or paid at December 31 amount to $4,500. Instructions: 1. Prepare the necessary adjusting journal entries on December 31, 2020.(32 points) 2. Post entries on the ledger accounts (T-accounts).(16 points) xPrepare the necessary year-end closing entries and post them in the ledger accounts.(12 points) Prepare an income statement for the year ended December 31, 2020. (10 points) xPrepare a statement of retained earnings for the year ended December 31, 2020. (10 points) Prepare a balance sheet dated December 31, 2020.(20 points)

Answer rating: 100% (QA)

Funky Vibes Working for Adjusting Entry Adjustment 3 Amount Note Unexpired Insurance 480000 A For the period months 1200 B Monthly Insurance expense 40000 CAB Adjustment 4 Amount Prepaid Rent 900000 D ... View the full answer