Fawcett Institute provides one on one training to

individuals who pay tuition #4297

Fawcett Institute provides one-on-one training to individuals who pay tuition directly to the
business and also offers extension training to groups in off-site locations. Fawcett prepares
adjusting entries monthly. Additional information available on December 31, 2014:
a. An analysis of the company's policies shows that $31,000 of insurance coverage has expired.
b. An inventory shows that teaching supplies costing $13,400 are on hand at the end of the
month.
c. The estimated monthly depreciation on the equipment is $650.
d. The estimated monthly depreciation on the professional library is $320.
e. The school offers off-campus services for specific operators. On December 1, the company
agreed to do a special four-month course for a client. The contract calls for a $5,400 monthly
fee, and the client paid the first two months' fees in advance. When the cash was received, the
Unearned Extension Fees account was credited.
f. On December 15, the school agreed to teach a four-month class to an individual for $1,600
tuition per month payable at the end of the class. The services have been provided as agreed,
and no payment has been received.
g. The school's only employee is paid weekly. As of the end of the month, wages of $1,200
have accrued.
h. The balance in the Prepaid Rent account represents the rent for December, January,
February, and March.

Required
1. Prepare the necessary December 31, 2014, month-end adjusting journal entries based on (a)
through (h) above.
Analysis Component:
2. Refer to the format presented in Exhibit 3.22 and prepare an adjusted trial balance using the
information in (a) through (h) above.
3. If the adjustments were not recorded, calculate the over- or understatement of income.View
Solution:
Fawcett Institute provides one on one training to individuals who pay tuition

ANSWER
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