House of Tutors, Incorporated (HTI), is a company that runs a tutoring service for high school...

Transcribed Image Text:

House of Tutors, Incorporated (HTI), is a company that runs a tutoring service for high school and university students. The company reported the following amounts in its post-closing trial balance, prepared at the end of its first fiscal year, at August 31. Accounts Payable Accounts Receivable Accumulated Depreciation Cash Common Stock Equipment Interest Payable Notes Payable (long-term) Retained Earnings Supplies $ 70 230 1,210 710 2,850 12,100 41 8,100 879 110 The company encountered the following events during September: a. HTI provided 100 hours of regular hourly tutoring at the rate of $22 per hour, all of which was collected in cash. b. HTI paid tutors at the hourly rate of $11 per hour. On September 28, HTI paid for 90 hours of tutor time and promised to pay the remaining hours worked. TIP: The total hours of expense in b. should match the total hours of revenue in a. c. HTI hosted an all-night review session on September 29 for people cramming for midterm exams, at a special price of $10 per attendee. Rather than collect cash at the time of the review session, HTI will send bills in October to the 76 people who attended the review session. d. At the beginning of the night-long review session, HTI paid $210 cash to its tutors for wages. No additional salaries and wages will be paid for the review session. e. HTI collected $210 cash on account from students who received tutoring during the summer. f. HTI also collected $260 cash from a high school for a tutoring session to be held in October. g. HTI determined that depreciation for September should be $110. h. Although HTI adjusted its accounts on August 31, it has not yet paid the $41 monthly interest owed on the promissory note, for either August or September. The note is due in three years. i. HTI has only $41 of supplies left at September 30. j. HTI's income taxes are approximately 30% of income before tax. House of Tutors, Incorporated (HTI), is a company that runs a tutoring service for high school and university students. The company reported the following amounts in its post-closing trial balance, prepared at the end of its first fiscal year, at August 31. Accounts Payable Accounts Receivable Accumulated Depreciation Cash Common Stock Equipment Interest Payable Notes Payable (long-term) Retained Earnings Supplies $ 70 230 1,210 710 2,850 12,100 41 8,100 879 110 The company encountered the following events during September: a. HTI provided 100 hours of regular hourly tutoring at the rate of $22 per hour, all of which was collected in cash. b. HTI paid tutors at the hourly rate of $11 per hour. On September 28, HTI paid for 90 hours of tutor time and promised to pay the remaining hours worked. TIP: The total hours of expense in b. should match the total hours of revenue in a. c. HTI hosted an all-night review session on September 29 for people cramming for midterm exams, at a special price of $10 per attendee. Rather than collect cash at the time of the review session, HTI will send bills in October to the 76 people who attended the review session. d. At the beginning of the night-long review session, HTI paid $210 cash to its tutors for wages. No additional salaries and wages will be paid for the review session. e. HTI collected $210 cash on account from students who received tutoring during the summer. f. HTI also collected $260 cash from a high school for a tutoring session to be held in October. g. HTI determined that depreciation for September should be $110. h. Although HTI adjusted its accounts on August 31, it has not yet paid the $41 monthly interest owed on the promissory note, for either August or September. The note is due in three years. i. HTI has only $41 of supplies left at September 30. j. HTI's income taxes are approximately 30% of income before tax.