Following is the unadjusted trial balance for augustus

institute as
Following is the unadjusted trial balance for Augustus Institute as of December 31, 2011, which
initially records prepaid expenses and unearned revenues in balance sheet accounts. The
Institute provides one-on-one training to individuals who pay tuition directly to the business and
offers extension training to groups in off-site locations. Shown after the trial balance are items a
through h that require adjusting entries as of December 31, 2011.Additional Information Itemsa.
An analysis of the Institute’s insurance policies shows that $3,000 of coverage has expired.b.
An inventory count shows that teaching supplies costing $3,000 are available at year-end
2011.c. Annual depreciation on the equipment is $17,000.d. Annual depreciation on the
professional library is $6,000.e. On November 1, the Institute agreed to do a special six-month
course (starting immediately) for a client. The contract calls for a $2,600 monthly fee, and the
client paid the first five months’ fees in advance. When the cash was received, the Unearned
Training Fees account was credited. The last one month’s fees will be recorded when earned
and collected in 2012.f. On October 15, the Institute agreed to teach a four-month class
(beginning immediately) to an individual for $3,900 tuition per month payable at the end of the
class. The class started on October 15, but no payment has yet been received.g. The Institute’s
only employee is paid weekly. As of the end of the year, two days’ wages have accrued at the
rate of $170 per day.h. The balance in the Prepaid Rent account represents rent for
December.Required1. For accounts listed in the unadjusted trial balance, prepare T-accounts
(representing the ledger) and enter the unadjusted balances.2. Prepare the necessary adjusting
journal entries for items a through h, and post them to the T-accounts. Assume that adjusting
entries are made only at year-end.3. Update balances in the T-accounts for the adjusting entries
and prepare an adjusted trial balance.4. Prepare Augustus Institute’s income statement and
statement of retained earnings for the year 2011, and prepare its balance sheet as of December
31, 2011.View Solution: Following is the unadjusted trial balance for augustus institute as
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