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Question: only for adjustments how to adjusted unearned revenue and how...

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Only for adjustments: how to adjusted unearned revenue? And how adjusted income tax expense?
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Jef Jackson, Kaicho, founded Running Water Aikido in 1980 and serves as the principal Sensei (teacher). The dojo, located in Seattle, has two lines of business: offering Aikido classes and selling Aikido-related gear. The dojo employs many instructors, as well as a dojo manager who maintains financial records and membership information. Students of the dojo sign up for 3-month or 12-month memberships. 3-month memberships require monthly payments of $150. For these memberships, the student pays cash on the last of each month (for example, on April 30 a student with a 3-month membership pays $150 for attending classes in the month of April). For 12-month memberships, students have two options. They can, as with the 3-month memberships, pay the membership fee monthly; this costs $120 per month. Alternatively, they can prepay their entire year at the beginning of the year. Prepayment for a year costs the student S1,200, or $100 per month. As of February 1, 2018, the dojo had students with the following active memberships: 31 students with 3-month memberships. 48 students with 12-month memberships; 36 were prepaid, and the remaining 12 paid monthly . The dojo also sells Aikido gear. They sell three items: gi (Aikido uniform), bokken (wooden sword), and jo (wooden combat staff). The cost to the studio for a gi is S15 and they sell them for S30. The cost and price of a bokken is S60 and $90, respectively, and the cost and selling price of a jo is $45 and $65 The following activities take place during the month ended February 28, 2018. 1. On February 28, the dojo manager collects cash from all students on existing 3- and 12- month memberships who pay monthly for February classes (that is, all but prepaid 12 2. On February 1, the dojo sells the following four (4) new 12-month prepaid 3. As a special promotion, the dojo sells a gi at cost to the four new members with a 12 4. The dojo sells 4 gi, 5 bokken, and 3 jo. These transaction are all for cash. month memberships) memberships. month prepaid membership. These sales are for cash To replenish inventory supplies, the dojo manager purchases 5 each of gi, bokken, and jo. 5. are purchased on account, payable on March 7, 2018 These Instructors earn $1,400 for classes taught during February. For these classes, $900 is 6. paid in cash during February with the remaining amount payable in March. On February 5, the dojo pay January 7. s instructors $400 cash for classes that had been taught in I8. On February 15, the dojo pays $1,500 for advertisements in Seattle Weekly. The advertisement will run from March 1 until April 30.
Utilities and other operating expenses for the month of February total $2,400. These are paid in caslh 9. 10. Jackson Sensei does not drasw a salary for his work as instructor, but draws a S4,000 monthly dividend from the profits of the dojo. This withdrawal is paid in cash on the last day of each month. Other Information In addition to the inventory, the dojo also has 15 bokken and 15 jo which are available to students for use during classes. These were purchased on June 30, 2016 at the prices noted above (S60 and $45 respectively). Their expected useful life is five (5) years. The depreciation on the dojo building is $1,250 per month. The dojo has a $60,000 loan that requires annual payments of interest. These payments take place each year on June 30, The annual interest rate is 8%. Positive pretax income has an income tax rate of 30%; taxes related to activities in February, 2017 are payable in April, 2018. · . · Required: Prepare journal entries or all transactions and adjustments for the month ended February 28, 2017. Please use the space provided on the following two pages
Ref # Accounts | Debit Credit adj a Unearned revenue 4,000 Service revenue 4,000 -or- Unearned revenue 3,600 Service revenue 3,600 (if they did the second option on (2)) adj b Depreciation expense 26.25 Acc depreciation-equipment 26.25 adj c Depreciation expense 1,250 Acc depreciation-building 1,250 400 adj d Interest expense 400 Interest payable 1,465.13 adj e Income tax expense 1,465.13 Income tax payable
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