Question

Required Information The following formation applies to the questions displayed below) Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017 follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through that require adjusting entries on December 31, 2017, follow. Additional Information Items 3. An analysis of WTI'S Insurance policies shows that $2.939 of coverage has expired. b. An Inventory count shows that teaching supplies cosung $2.547 are available at year-end 2017 c. Annual depreciation on the equipment is $11.756. d. Annual depreciation on the professional library is $5.878 e. On November 1, WTI agreed to do a special six-month course starting immediately for a client. The contract calls for a monthly fee of $2,600, and the client paid the first five months fees in advance When the cash was received the Unearned Training Fees account was credited The fee for the sixth month will be recorded when it is collected in 2018 1. On October 15, WTI agreed to teach a four-month class beginning Immediately for an individual for $3.180 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WT'S accruals are applied to the nearest half-month, for example, October recognizes month accrual g. WTI'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 h. The balance in the Prepaid Rent account represents rent for Decer

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Answer 1

WELLS TECHNICAL INSTITUTE
Income Statement
For year Ended December 31,2017
Training Fees Earned	45,020.00
Tuition Fees Earned	114,835.00
Total Revenues		159,855.00
Expenses
Depreciation Expense- Equipment	11,756.00
Salaries Expense	50,700.00
Insurance Expense	2,939.00
Rent Expense	25,164.00
Teaching Supplies Expense	7,931.00
Utilities Expense	5,868.00
Advertising Expense	7,336.00
Depreciation Expense- Professional Library	5,878.00
Total Expenses		117,572.00
Net income		42,283.00

WELL TECHNICAL INSTITUTE
Statement of Retained Earnings
For Year Ended December 31,2017
Retained Earnings December 31,2016	52,646.00
Add: Net income	42,283.00
	94,929.00
Less: Dividends	41,916.00
Retained Earnings December 31,2017	53,013.00

Balance Sheet
December,31,2017
Assets
Cash		27,245.00
Accounts Receivable		7,950.00
Teaching Supplies		2,547.00
Prepaid Insurance		12,780.00
Professional Library	31,436.00
Accumulated Depreciation - Professional Library	15,310.00	16,126.00
Equipment	73,338.00
Accumulated Depreciation - Equipment	28,524.00	44,814.00
Total Assets	148,608.00	111,462.00
Liabilities
Accounts Payable		36,249.00
Salaries Payable		400.00
Unearned Training Fees		7,800.00
Total Liabilities		44,449.00
Equity
Common Stock	14,000.00
Retained Earnings	53,013.00	67,013.00
Total Liabilities and Equity		111,462.00