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 | ||
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. |
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