New Education Agency is a business which provides coaching and consulting service to students, parents and institutions. Some clients…

New Education Agency is a business which provides coaching and consulting service to students, parents and institutions. Some clients…

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New Education Agency is a business which provides coaching and consulting service
to students, parents and institutions. Some clients pay in advance with payments
credited to Unearned agency fees; others are billed after services have been performed.
An adjusted trial balance dated November 30, 2022 follows.
Cash
Fees receivable
Prepaid rent
Unexpired insurance policies
Office supplies
Office equipment
New Education Agency
Adjusted Trial Balance
30 November, 2022
Accumulated depreciation: office equipment
Accounts payable
Income taxes payable
Dividend payable
Uneamed agency fees
Salaries payable
Share capital
Retained earnings
Dividends
Agency fees earned
Telephone expense
Office supply expense
Depreciation expense: office equipment
Rent expense
Insurance expense
Salaries expense
Income taxes expense
Totals
14,845
34,240
1,500
720
640
21,000
400
880
1,080
1,925
5,500
1,980
19,850
3,350
107,910
6,125
2,385
3,350
400
7,700
1,210
40,000
10,800
35,940
107,910 Below are the transactions of the company in December 2022:
Dec 1
Issued 1,000 shares of share capital in exchange for $10,000 cash
Borrowed $11,000 from bank by issuing 6-month notes payable.
Purchased office supplies that cost $500 with $230 cash and the
balance on account.
Paid the dividend of $400 declared in October 2022 which become
due on 7 December 2022 to shareholders.
10
Billed clients $3,560 for agency service performed, with $2,000
collected immediately by cash and the balance due in next month.
13 Received $2,000 from clients in advance for service to be conducted
over the next few months.
2.
2
3
9.
7
Instructions
(a) Journalize the December transactions.
(b) Post the journal entries to the T-accounts.
(c) Prepare an unadjusted trial balance at 31 December 2022.
(d) Refer to the following information, journalize adjusting entries for the month of
December 2022.
17
Collected fees receivable of $5,800 from a client.
21 Issued a check in full payment of the office supplies purchased on 3
December.
26 Declared a dividend of $400 to be paid on 24 February 2023.
30 Paid December’s salary expense of $1,790 and settled all salary
payable outstanding.
1. Records show that $4,200 of cash receipts originally recorded as Unearned
agency fees had been earned as of 31 December.
Office Equipment have a useful life of 10 years, to be depreciated using
straight line method.
3.
The company had paid $2,160 cash on 1 April for an annual insurance policy
effective April 1.
4.
The company had paid $3,000 cash on 1 September for a 6-month rent
effective 1 September.
5.
6.
7.
were $8,300.
8.
The balance of notes payable represents a 6-month 6% note signed on 1
December 2022, with all interests and the balance to be settled on maturity
The company’s CPA estimates that me taxes expense for the year is
$4,200.
Accrued but unpaid employee salaries were $3,150.
A count shows $720 of supplies on hand at 31 December..
Agency services performed but unbilled and uncollected at 31 December
(e) Prepare an adjusted trial balance at 31 December 2022.

Expert Answer:

Answer rating: 100% (QA)

SOLUTION a Journalize the December transactions Dec 3 Office Supplies 500 Accounts Payable 270 Cash 230 Dec 10 Accounts Receivable 3 560 Agency Fees
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