House of Tutors, Incorporated, (HTI) is a company that runs a tutoring service for high school and university students. The…

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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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