House of Tutors, Incorporated, (HTI) is a company that runs a tutoring service for high school and university students. The…
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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
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| Accounts Payable |
$ |
50 |
|
| Accounts Receivable |
|
270 |
|
| Accumulated Depreciation |
|
1,250 |
|
| Cash |
|
750 |
|
| Contributed Capital |
|
3,000 |
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| Equipment |
|
12,500 |
|
| Interest Payable |
|
45 |
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| Note Payable (long-term) |
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8,500 |
|
| Retained Earnings |
|
795 |
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| Supplies |
|
120 |
|
| |
| a. |
HTI provided 100 hours of regular hourly tutoring at the rate of $18 per hour, all of which was collected in cash.
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| 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.
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| 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.
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| 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.
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| 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.
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| j. |
HTI has only $45 of supplies left at September 30. |
| k. |
HTI’s income taxes are approximately 30% of income before tax.
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