Question

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 h that require adjusting entries on December 31, 2017, follow. Additional Information Items a. An analysis of WTI's insurance policies shows that $3,071 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,662 are available at year-end 2017 c. Annual depreciation on the equipment is $12,285. d. Annual depreciation on the professional library is $6.142. 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 $2,400, and the client paid the first five months' fees in advance. When the cash was received, the Uneamed Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018. f. On October 15. WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,640 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half month, for example, October recognizes one-half month accrual.) 9. 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

Answer 1

Requirement 2A

Transaction	General Journal	Debit	Credit
a	Insurance expense	$3,071
	Prepaid insurance		$3,071
	[To record insurance expense]
b	Teaching Supplies expense [10,768-2,662]	$8,106
	Teaching Supplies		$8,106
	[To record supplies expense]
c	Depreciation expense-Equipment	$12,285
	Accumulated depreciation-Equipment		$12,285
	[To record depreciation expense on equipment]
d	Depreciation expense-professional library	$6,142
	Accumulated depreciation-professional library		$6,142
	[To record depreciation expense on professional library]
e	Unearned training fees	$4,800
	Training fees [$2,400 x 2 courses]		$4,800
	[To record fees earned from unearned]
f	Accounts receivable	$9,100
	Tuition fees earned [$3,640 x 2.5 months]		$9,100
	[To record accrued tuition fees earned]
g	Salaries expense [$100 x 2 days x 2 employees]	$400
	Salaries payable		$400
	[To record accrued salaries]
h	Rent Expense	$2,155
	Prepaid rent		$2,155
	[To record rent expense]

Requirement 2B:

Cash					Equipment
Unadj. Bal.	$28,000				Unadj. Bal.	$75,368
Adj. Bal.	$28,000				Adj. Bal.	$75,368
Accounts receivable					Accumulated Depreciation-Equipment
Unadj. Bal.	$0				Unadj. Bal.			$17,232
f	$9,100						c	$12,285
Adj. Bal.	$9,100				Adj. Bal.			$29,517
Teaching Supplies					Accounts payable
Unadj. Bal.	$10,768				Unadj. Bal.			$38,613
		b	$8,106
Adj. Bal.	$2,662				Adj. Bal.			$38,613
Prepaid insurance					Salaries payable
Unadj. Bal.	$16,155				Unadj. Bal.			$0
		a	$3,071				g	$400
Adj. Bal.	$13,084				Adj. Bal.			$400
Prepaid rent					Unearned training fees
Unadj. Bal.	$2,155				Unadj. Bal.			$12,000
		h	$2,155		e	$4,800
Adj. Bal.	$0				Adj. Bal.			$7,200
Professional library					T.Wells, Capital
Unadj. Bal.	$32,307				Unadj. Bal.			$68,493
Adj. Bal.	$32,307				Adj. Bal.			$68,493
Accumulated depreciation-Professional library					T. Wells, Withdrawals
Unadj. Bal.			$9,693		Unadj. Bal.		43078	$82,000
		d	$6,142
Adj. Bal.			$15,835		Adj. Bal.			$82,000
Tuition fees					Dividends
Unadj. Bal.			$109,846		Unadj. Bal.
		f	$9,100
Adj. Bal.			$118,946		Adj. Bal.	$0
Training fees					Rent expense
Unadj. Bal.			$40,923		Unadj. Bal.	$23,705
		e	$4,800		h	$2,155
Adj. Bal.			$45,723		Adj. Bal.	$25,860
Depreciation expense-Professional library					Teaching supplies expense
Unadj. Bal.	$0				Unadj. Bal.	$0
d	$6,142				b	$8,106
Adj. Bal.	$6,142				Adj. Bal.	$8,106
Depreciation expense-Equipment					Advertising expense
Unadj. Bal.	$0				Unadj. Bal.	$7,539
c	$12,285
Adj. Bal.	$12,285				Adj. Bal.	$7,539
Salaries expense					Utilities expense
Unadj. Bal.	$51,694				Unadj. Bal.	$6,031
g	$400
Adj. Bal.	$52,094				Adj. Bal.	$6,031
Insurance expense
Unadj. Bal.	$0
a	$3,071
Adj. Bal.	$3,071