Required information [The following information applies to the questions display

Question

Required information [The following information applies to the questions displayed below.] Golf Academy, Inc., provides private golf lessons. Its unadjusted trial balance at December 31, 2018, follows, along with information about selected accounts. Debit Credit Further Information Account Names Cash Supplies Deferred Revenue 32,700 760 As reported on December 31 bank statement. Based on count, only $280 of supplies still exist. and $580 for January lessons December 28. They have not yet been paid for work on 4,380 Of this amount, $3,800 was received for December lessons Salaries and Wages payable 0 Employees were paid $1,800 for 10 days of work through December 29 and 30 Income Tax Payable Interest Payable Notes Payable (long-term) 0 The company has paid last year's income tax but not this year's tax 0 The company has not paid the $110 of interest owed on its notes payable for the current period 13,200 This one-year note was taken out this year on December1. Common Stock 1,000 This amount was contributed for common stock in prior years Retained Earnings 3,800 This is the balance reported at the end of last year 1,180 Most customers pay cash for lessons each time they are Service Revenue provided, but some customers pay Employees worked through December 30, but did not work on December 31 This is the cost of supplies used through November 30 The company has not paid the $110 of interest owed on its notes payable for the current period The company has an average tax rate of 30% in advance Salaries and Wages Expense 36,900 Supplies Expense Interest Expense 3,200 Income Tax Expense Totals $73,560 $73,560

Explanation / Answer

Adj. Balance sheet account Related income statement account Amount 1 Supplies Supplies expense 480 =760-280 2 Deferred revenue Service revenue 3800 3 Salaries and wages payable Salaries and wages expense 360 =1800/10*2 4 Income tax payable Income tax expense 4179 5 Interest payable Interest expense 110 Calculation of income tax expense: Service revenue 54980 =51180+3800 Expenses: Salaries and wages expense 37260 =36900+360 Supplies expense 3680 =3200+480 Interest expense 110 Total Expenses 41050 Income before income taxes 13930 Income tax expense = 13930*30%= $4179

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