Question

Following is data for Pitt-Vaughn Academy (PVA). Use the data below to answer each of the enumerated requirements.

Pitt-Vaughn Academy (PVA), a school owned by Lily Pitt-Vaughn, provides training to individuals who pay tuition directly to the school. PVA also offers training to groups in off-site locations. PVA initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31.

Additional Information Items

1. An analysis of PVA's insurance policies shows that $3,732 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,235 are available at year-end.
3. Annual depreciation on the equipment is $14,929.
4. Annual depreciation on the professional library is $7,464.
5. On September 1, PVA agreed to do five courses for a client for $2,700 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $13,500 cash in advance for all five courses on September 1, and PVA credited Unearned Training Fees.
6. On October 15, PVA agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $11,600 of the tuition has been earned by PVA.
7. PVA's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.
8. The balance in the Prepaid Rent account represents rent for December.
   

Pitt-Vaughn Academy Unadjusted Trial Balance December 31
	Debit			Credit
Cash	$	27,396
Accounts receivable		0
Teaching supplies		10,536
Prepaid insurance		15,806
Prepaid rent		2,108
Professional library		31,610
Accumulated depreciation—Professional library				$	9,484
Equipment		73,751
Accumulated depreciation—Equipment					16,861
Accounts payable					36,022
Salaries payable					0
Unearned training fees					13,500
L. Pitt-Vaughn, Capital					67,016
L. Pitt-Vaughn, Withdrawals		42,149
Tuition fees earned					107,477
Training fees earned					40,040
Depreciation expense—Professional library		0
Depreciation expense—Equipment		0
Salaries expense		50,579
Insurance expense		0
Rent expense		23,188
Teaching supplies expense		0
Advertising expense		7,376
Utilities expense		5,901
Totals	$	290,400		$	290,400

Required:

1. Prepare the required adjusting journal entries for items a through h.
2. Prepare the Adjusted Trial Balance
3. Prepare the Income Statement for the year end
4. Prepare the Statement of Owner’s Equity for the year
5. Prepare the Balance Sheet as of December 31

Use the information in the financial statements to calculate the following ratios:

1. Return on Assets
2. Debt ratio
3. Profit margin
4. Current ratio

Below are the industry averages for the corresponding ratios

• Return on Assets = 11.48%
• Debt ratio = 42%
• Profit margin = 21.60%
• Current ratio = 1.06

How does the company’s performance compare to that of the industry? Provide a brief discussion of the company’s performance. Your discussion should be at least 4 well-articulated sentences.

Answer 1

Note:- As per HOMEWORKLIB RULES, 4 parts has been answered