Question

Required information

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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

1. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,433 are available at year-end.
3. Annual depreciation on the equipment is $11,227.
4. Annual depreciation on the professional library is $5,614.
5. 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.
6. 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, $7,548 of the tuition has been earned by WTI.
7. 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.
8. The balance in the Prepaid Rent account represents rent for December.
   

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31
	Debit			Credit
Cash	$	28,151
Accounts receivable		0
Teaching supplies		10,826
Prepaid insurance		16,242
Prepaid rent		2,166
Professional library		32,481
Accumulated depreciation—Professional library				$	9,746
Equipment		99,000
Accumulated depreciation—Equipment					17,325
Accounts payable					26,000
Salaries payable					0
Unearned training fees					12,500
Common stock					22,464
Retained earnings					82,000
Dividends		43,310
Tuition fees earned					110,438
Training fees earned					41,143
Depreciation expense—Professional library		0
Depreciation expense—Equipment		0
Salaries expense		51,972
Insurance expense		0
Rent expense		23,826
Teaching supplies expense		0
Advertising expense		7,579
Utilities expense		6,063
Totals	$	321,616		$	321,616

2-a. Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts.
2-b. Prepare an adjusted trial balance.

Answer 1

	Part 2-a
	Cash Equipment Unadj. Bal. 28151 Unadj. Bal. 99000 Adj. Bal. 28151 Adj. Bal. 99000 Accounts Receivable Accumulated Depreciation—Equipment Unadj. Bal. 0 Unadj. Bal. 17325 f 7548 c 11227 Adj. Bal. 7548 Adj. Bal. 28552 Teaching Supplies Accounts Payable Unadj. Bal. 10826 0 Unadj. Bal. 26000 0 b 8393 0 Adj. Bal. 2433 Adj. Bal. 26000 Prepaid Insurance Salaries Payable Unadj. Bal. 16242 Unadj. Bal. 0 a 2807 g 400 Adj. Bal. 13435 Adj. Bal. 400 Prepaid Rent Unearned Training Fees Unadj. Bal. 2166 Unadj. Bal. 12500 h 2166 e 5000 Adj. Bal. 0 Adj. Bal. 7500 Professional Library Common Stock Unadj. Bal. 32481 Unadj. Bal. 22464 Adj. Bal. 32481 Adj. Bal. 22464 Accumulated Depreciation—Professional Library Dividends Unadj. Bal. 9746 Unadj. Bal. 43310 d 5614 Adj. Bal. 15360 Adj. Bal. 43310 Tuition Fees Earned Insurance Expense Unadj. Bal. 110438 Unadj. Bal. 0 f 7548 a 2807 Adj. Bal. 117986 Adj. Bal. 2807 Training Fees Earned Rent Expense Unadj. Bal. 0 41143 Unadj. Bal. 23826 0 e 5000 h 2166 Adj. Bal. 46143 Adj. Bal. 25992 Depreciation Expense—Professional Library Teaching Supplies Expense Unadj. Bal. 0 Unadj. Bal. 0 d 5614 b 8393 Adj. Bal. 5614 Adj. Bal. 8393 Depreciation Expense—Equipment Advertising Expense Unadj. Bal. 0 Unadj. Bal. 7579 c 11227 Adj. Bal. 11227 Adj. Bal. 7579 Salaries Expense Utilities Expense Unadj. Bal. 51972 Unadj. Bal. 6063 g 400 Adj. Bal. 52372 Adj. Bal. 6063 Retained earnings Unadj. Bal. 82000 Adj. Bal. 82000