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Renshen Company(“Renshen'”)is an on-line platform that matches tutors with students for private

By December 6, 2021No Comments

Renshen Company(“Renshen'”)is an on-line platform that matches tutors with students for privatetutoring services.The Company charges both students and tutors 5%on the monthly tuition fees asService Revenue and receives payment next month.Besides,the Company uses its website to earnAdvertising Revenue.The company adjusts its accounts monthly and prepares closing entriesannually on 31 December.Below is the unadjusted trial balance dated 31 December 2021:DrCrCash280,556-Accounts Receivable142.300Supplies4.960Prepaid Insurance10.0006%.2-year Note Receivable (due on 31 December 2022)20.000Land680.000Equipment576.000Accumulated Depreciation:Equipment174.0004%,1-year Note Payable (due on 31 December,2021)120.000Accounts Payable60.316Income Taxes Payable50.000Interest Payable1.200Share Capital Issued (@S2 per share)800,000Retained Earnings128.900Service Revenue1.170.000Advertising Revenue110,000Supplies Expense39.000Depreciation Expense:Equipment24.000Salaries Expense261.000Selling Expense16.000Interest Expense3.600Insurance Expense50.000Rent Expense457.000Income Taxes Expense50.000TOTAL2.614.4162.614.416Information on adjusting entries:(1)Supplies on hand on 31 December 2021 were $1,960.(2)Accrued,unrecorded and unpaid salaries for December amounted to $29,000(3)Tuition fees for December was $100,000.The service revenue earned is uncollected andunrecorded.(④)Equipment is depreciated using straight line method over20 years with no residual value.Thelast adjusting entry was made on 31 October,2021.(5)Income taxes expense for the year amounted to S55,000.The amount is due in March 2022.(6)Renshen bought a 3-month insurance plan on 1 October 2021.(7)On 1 January 2021,Renshen lent out $20,000 to AA Company by a 2-years note receivable at6%annual interest rate.The Company will receive the principal and all accrued interests on thematurity date in 2022.No adjusting entries were done on all the accrued interest so far.(8)In November Renshen issued another 30,000 shares at $2.00 per share but no record was made.(9)On 31 December Renshen declared and paid a dividend of S0.1 per all the issued shares but noentry was made.(10)On 1 January 2021,Renshen borrowed $120,000 by signing a 1 year note payable at 4%annual interest rate.Interest was paid half-yearly on 30 June and 31 December.The firstinterest payment was made and recorded.No adjusting entries were done since 1 October2021.On 31 December,the Company made full payment but this was unrecorded.(11)On 30 December 2021,Renshen signed a contract with 4M Company for them to advertise inRenshen’s website from 1 to 31 March 2022.Total advertising fee is S100,000 and 4M willpay this amount on 1 February 2022Required(a)Prepare the necessary adjusting entries on 31 December 2021.Explanations and workings areNOT required.Use the account titles given in the Trial Balance or create new accounts whereappropriate.If any event does not require adjustment,state“No entry”and No explanation isrequired.(b)Prepare closing entries to close the books of Renshen Company as at 31 December 2021.