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House of Tutors, Incorporated, (HTI) is a company that runs a tutoring service for high school and university students. The company reported the following amounts in its post-closing trial balance, prepared at the end of its first fiscal year, at August 31, 2013. |
| Accounts Payable | $ | 50 | |
| Accounts Receivable | 270 | ||
| Accumulated Depreciation | 1,250 | ||
| Cash | 750 | ||
| Contributed Capital | 3,000 | ||
| Equipment | 12,500 | ||
| Interest Payable | 45 | ||
| Note Payable (long-term) | 8,500 | ||
| Retained Earnings | 795 | ||
| Supplies | 120 | ||
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| The company encountered the following events during September 2013: |
| a. |
HTI provided 100 hours of regular hourly tutoring at the rate of $18 per hour, all of which was collected in cash. |
| b. |
HTI paid tutors at the hourly rate of $9 per hour. On September 28, HTI paid for 90 hours of tutor time and promised to pay the remaining hours worked. |
| c. |
HTI hosted an all-night review session on September 29 for people cramming for midterm exams, at a special price of $10 per attendee. Rather than collect cash at the time of the review session, HTI will send bills in October to the 80 people who attended the review session. |
| d. |
At the beginning of the night-long review session, HTI paid $250 cash to its tutors for wages. No additional wages will be paid for the review session. |
| e. | HTI collected $250 cash on account from students who received tutoring during summer 2013. |
| f. | HTI also collected $300 cash from a high school for a tutoring session to be held in October 2013. |
| g. | HTI determined that depreciation for September should be $150. |
| h. | On September 30, HTI declared and paid a $550 cash dividend. |
| i. |
Although HTI adjusted its accounts on August 31, it has not yet paid the $45 monthly interest owed on the promissory note, for either August or September. The note is due October 2016. |
| j. | HTI has only $45 of supplies left at September 30. |
| k. |
HTI s income taxes are approximately 30% of income before tax. |
- 1.Record the entry for the provison of 100 hours of regular hourly tutoring at the rate of $18 per hour, all of which was collected in cash.
- 2.Record the entry for payment by HTI for 90 hours of tutor time. HTI paid tutors at the hourly rate of $9 per hour. HTI promised to pay the remaining hours worked.
- 3.Record the entry for the all night review session at a special price for $ 10 per attendee. Rather than collect cash at the time of the review session, HTI will send bills in October to the 80 people who attended the review session.
- 4.Record the payment of $250 cash to its tutuor for wages, at the beginning of the night-long review session. No additional wages will be paid for the review session.
- 5.Record the collection of $250 cash on account from students who received tutoring during summer 2013.
- 6.Record the collection of $300 cash from a high school for a tutoring session to be held in October 2013.
- 7.Record the entry for depreciation of $150 determined by HTI for September.
- 8.Record the declaration and payment of $550 cash dividend.
- 9.Record the entry for the $45 monthly interest owed on the promissory note but not yet paid, for either August or September. The note is due October 2016. HTI adjusted its accounts on August 31.
- 10.Record the entry for only $45 of supplies left at September 30.
- 11.Record the entry for income taxes which are approximately 30% of income before tax.