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. ts unadjusted trial balance at December 31, 2018, follows, along with information about selected accounts. Cash Supplies Deferred Revenue ther Information As reported on December 31 bank statement Based on count, only $270 of supplies still exist $32,600 740 s 3,070 of this amount, $2,500 was received for December lessons 0 Employees were paid $1,700 for 10 days of work through 0 The company has paid last year'a income tax but not this 0 The company has not paid the $105 of interest owed on its and $570 for January lessons. Salaries and Wages payable December 28. They have not yet been paid for work on Decenber 29 and 30. Income Tax Payable Interest Payable Notes Payable (long-term) year's tax notes payable for the current period. 12,600 This one-year note was taken out this year on December 1. 1,000 This amount was contributed for common stock in prior 3,700 Thia in the balance reported at the end of last year. Common Stock years Retained Earnings Service Revenue 52,870 Most customere pay cash for lessons each time they are provided, but some customers pay in advance. Employees worked through December 30, but did not vork on December 31. This in the cost of supplies used through November 30. The company han not paid the $105 of interest owed on itra notes payable for the current period. The company has an average tax rate of 20%. Salaries and Wages Expense 36,800 3,100 Supplies Expense Interent Expense Income Tax Expense Totals $73,240 $73,240

Explanation / Answer

Note 1 = Out of 740 , only 270 still exist. it means remaining suppliy is used in december.so it will be added in supplies expense.

Note 2 = wages payable of 2 days = 1700/10*2 = 340. Outstanding wages will be expense of current year.

Note 3 = last year,s income tax is not a expense in current year. we have to consider current year expense only.

Note 4 = Interest not paid of current year will be considered as expense.it will be then shown as outstanding liab. in balance sheet.

Income statement

Particulars Amount Amount Service revenue (52870-570) (Advance for jan deducted) 52300 Less: Supplies expense (3100+470) (Note 1) (3570) Wages expense ( 36800+ 340) ( note 2 ) (37140) Interest expense (Note 4) (105) (40185) Income befor tax 11485 Less income tax (11485*20/100) (2297) Income after tax ( Net income of current year) 9188

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