Question

PacRim Careers provides training to individuals who pay tuition directly to the business. The business also offers extension training to groups in off-site locations. Additional information available at the December 31, 2020, year-end follows:

1. An analysis of the company’s policies shows that $1,330 of insurance coverage has expired.
2. An inventory shows that teaching supplies costing $530 are on hand at the end of the year.
3. The estimated annual depreciation on the equipment is $9,000
4. The estimated annual depreciation on the professional library is $4,860.
5. The school offers off-campus services for specific employers. On November 1, the company agreed to do a special six-month course for a client. The contract calls for a monthly fee of $870, and the client paid the first five months' revenue in advance. When the cash was received, the Unearned Extension Revenue account was credited.
6. On October 15, the school agreed to teach a four-month class for an individual for $1,280 tuition per month payable at the end of the class. The services to date have been provided as agreed, but no payment has been received.
7. The school's two employees are paid weekly. As of the end of the year, three days' wages have accrued at the rate of $130 per day for each employee.
8. The balance in the Prepaid Rent account represents the rent for three months: December, January, and February.

PACRIM CAREERS Trial Balances December 31, 2020
	Unadjusted										Adjusted
	Trial Balance							Adjustments			Trial Balance
Account		Dr.				Cr.		Dr.	Cr.		Dr.	Cr.
Cash	$	18,800
Accounts receivable		0
Teaching supplies		7,300
Prepaid insurance		1,480
Prepaid rent		8,400
Professional library		64,800
Accumulated depreciation, professional library					$	19,440
Equipment		108,000
Accumulated depreciation, equipment						36,000
Accounts payable						2,900
Salaries payable						0
Unearned extension revenue						7,100
Karoo Ashevak, capital						237,000
Karoo Ashevak, withdrawals		96,000
Tuition revenue						214,640
Extension revenue						80,500
Depreciation expense, equipment		0
Depreciation expense, professional library		0
Salaries expense		214,000
Insurance expense		0
Rent expense		52,000
Teaching supplies expense		0
Advertising expense		14,800
Utilities expense		12,000
Totals	$	597,580			$	597,580

Answer 1

Complete the worksheet as fallows

PC Inc
Trial Balances
December 31, 2020
	Unadjusted		Adjustments				Adjusted
	Trial Balance						Trial Balance
Account Title	Debit	Credit		Debit		Credit	Debit	Credit
Cash	18,800						18,800
Accounts receivable	0		f	$3,200			$3,200
Teaching supplies	7,300				b	$6,770	530
Prepaid insurance	1,480				a	$1,330	$150
Prepaid rent	8,400				h	$2,800	5,600
Professional library	64,800						64,800
Accumulated depreciation, professional library		19,440			d	$4,860		$24,300
Equipment	108,000						108,000
Accumulated depreciation, equipment		36,000			c	$9,000		$45,000
Accounts payable		2,900						2,900
Salaries payable		0			g	$780		$780
Unearned extension revenue		7,100	e	$1,740				$5,360
Karoo Ashevak, capital		237,000						237,000
Karoo Ashevak, withdrawals	96,000						96,000
Tuition revenue		214,640			f	$3,200		$217,840
Extension revenue		80,500			e	$1,740		$82,240
Depreciation expense, equipment	0		c	$9,000			$9,000
Depreciation expense, professional library	0		d	$4,860			$4,860
Salaries expense	214,000		g	$780			$214,780
Insurance expense	0		a	$1,330			$1,330
Rent expense	52,000		h	$2,800			$54,800
Teaching supplies expense	0		b	$6,770			$6,770
Advertising expense	14,800						$14,800
Utilities expense	12,000						$12,000
Totals	$597,580	$597,580		$30,480		$30,480	$615,420	$615,420
Notes
Supplies expense =$6,770 ($7,300 − 530)
Extension revenue earned = $1,740 (870 per month × 2 months)
Tuition revenue earned = $3,200 ($1,280 per month × 2.5 months)
Accrued salaries = $780 (2 employees × $130 per employee × 3 days)
Rent expired = $2,800 (8,400 ÷ 3)