Question

Required information Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P5, P6 [The following information 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. WTI 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 a. An analysis of WTi's Insurance policies shows that $2.400 of coverage has expired. b. An Inventory count shows that teaching supplies costing $2,800 are available at year-end. c. Annual depreciation on the equipment is $13,200. d. Annual depreciation on the professional library is $7.200. e. On September 1, WTI agreed to do five courses for a client for $2.500 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 $12,500 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. f. On October 15, WTI agreed to teach a four-month class (beginning immediately for an executive with payment due at the end of the class. At December 31, $7.500 of the tuition has been earned by WTL 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 December. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Credit

Answer 1

WELLS TECHNICAL INSTITUTE
Adjusted trial balance

December 31

	debit	Credit
Cash	34000
Account receivable	7500
Teaching supplies	2800
Prepaid insurance	9600
Prepaid rent	0
Professional library	35000
Accumulated depreciation-professional library		17200
Equipment	80000
Accumulated depreciation-equipment		28200
Account payable		26000
Salaries payable		400
Unearned training fees		7500
Common Stock		10000
Retained earnings		80000
Dividend	50000
Tuition fees earned		131400
Training fees earned		45000
Depreciation expense-Professional library	13200
Depreciation expense-equipment	7200
Salaries expense	50400
Insurance expense	2400
Rent expense	36000
Teaching supplies expense	5200
Advertising expense	6000
Utilities expense	6400
Total	345700	345700