- Q12 Quinn Spellman Formed Spellman Tutoring Inc Sti And It Has Since Become A Popular Provider Of Academic Tutoring W 1 (461.54 KiB) Viewed 12 times
Q12 Quinn Spellman formed Spellman Tutoring, Inc (STI) and it has since become a popular provider of academic tutoring within the local community. You are working with the
company to prepare the 20X1 financial statements and Quinn provides you with the below 12/31/20X1 account balances, all of which are normal. As indicted by the
question mark, certain balances have been intentionally omitted. A/C # 100 105 110 115 Teaching supplies Copy Machine 120 125 130 200 205 210 215 220 225 Account Description Cash Accounts receivable Prepaid insurance expense Accumulated depreciation Land Accounts Payable- SSC Interest Payable Tutoring Advance Pay Wages Payable Utilities Payable Notes payable Balance A/C# $? 300 12,000 305 9,000 310 38,000 400 16,000 500 13,320 505 25,000 510 7,000 515 0 520 0 0 0 40,000 525 530 535 540 Account Description Common stock Retained earnings Dividends Tutoring Revenue Advertising Expense Depreciation expense Equipment Rental Expense Insurance Expense Interest expense Miscellaneous Expense Supplies Expense Utilities expense Wages expense Balance $30,000 20,000 20,000 215,000 40,000 0 9,000 7,000 0 ? 0 11,000 105,000 For purposes of this
question, assume STI (Spellman Tutoring, Inc) has net income for the twelve months ended 12/31/20X1 totaling $43,000. Please consider the following 4 transactions and select the answer choice below representing the updated 20X1 net income after considering these items. (i) STI purchases all teaching supplies on account from vendor SSC. On New Year's Day, January 1, 20X2, while the
company was closed for business, Quinn counted the teaching supplies (a/c 115) noting that $18,000 of supplies were on hand. (ii) Also on January 1, 20X2, Quinn mailed invoices for $4,000 of tutoring services performed in late December 20X1. (iii) On Monday, January 4 20X2 Quinn received the December utility bill in the amount of $800 and (iv) Also on Monday, January 4, Quinn paid employee wages totaling $2,500. STI employees work Monday-Friday, receive paid holidays, and never work overtime. Each Monday employees are paid for the prior 5-day work week. A. $24,200 B. $25,700 C. $19,700 D. $23,700 E. None of the answers provided are correct.
Q#13 Consider the 4 situations described in Q#12 and consider the resulting journal entries. In class and in your lecture notes we categorized adjusting entries as to type. How many of the adjusting journal entries required for the 4 situations described would be considered an adjustment of an existing deferred expense? A. 0 B. 1 C. 2 D. 3 E. 4