CP$4-4($Algo$)$ Identifying and Preparing Adjusting Journal Entries $[$LO $4-1,$ LO $4-2,$ LO $4-3,$ LO $4-6]$

Skip to question

$[$The following information applies to the questions displayed below.$]$

Golf Academy, Incorporated, provides private golf lessons. Its unadjusted trial balance at December $31,2021,$ follows, along with information about selected accounts.

Account Names Debit Credit Further Information

Cash $ $31,200$ As reported on December $31$ bank statement.

Supplies $460$ Based on count, only $$130$ of supplies still exist.

Deferred Revenue $ $2,730$ Of this amount, $$2,300$ was received for December lessons and $$430$ for January lessons.

Salaries and Wages Payable $0$ Employees were paid $$2,700$ for $10$ days of work through December $28.$ They have not yet been paid for work on December $29$ and $30.$

Income Tax Payable $0$ The company has paid last year$$s income tax but not this year$$s tax.

Interest Payable $0$ The company has not paid the $$125$ of interest owed on its notes payable for the current period.

Notes Payable $($long$-$term$)15,000$ 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 $2,300$ This is the balance reported at the end of last year.

Service Revenue $47,730$ Most customers pay cash for lessons each time they are provided, but some customers pay in advance.

Salaries and Wages Expense $35,400$ Employees worked through December $30$ but did not work on December $31.$

Supplies Expense $1,700$ This is the cost of supplies used through November $30.$

Interest Expense $0$ The company has not paid the $$125$ of interest owed on its notes payable for the current period.

Income Tax Expense $0$ The company has an average tax rate of $20\%.$

Totals $ $68,760$ $ $68,760$

CP$4-4($Algo$)$ Part $2$

Name the five pairs of balance sheet and income statement accounts that require adjustment and indicate the amount of adjustment for each pair.