Question

Required information [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. Its unadjusted trial balance as of December 31, 2018, 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, 2018, follow. Additional Information Items NO a. An analysis of WTI's insurance policies shows that $2,674 b. An inventory count shows that teaching supplies costing $2,318 are available at year-end 2018. c. Annual depreciation on the equipment is $10,698. d. Annual depreciation on the professional library is $5,349. 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 $2,900, 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 2019. f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $2,361 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.) 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

Answer 1

T-accounts:

Cash					Equipment
Unadj. Bal.	$26,340				Unadj. Bal.	$70,903
Adj. Bal.	$26,340				Adj. Bal.	$70,903
Accounts receivable					Accumulated Depreciation-Equipment
Unadj. Bal.	$0				Unadj. Bal.			$16,210
f	$7,250						c	$10,698
Adj. Bal.	$7,250				Adj. Bal.			$26,908
Teaching Supplies					Accounts payable
Unadj. Bal.	$10,129				Unadj. Bal.			$33,112
		b	$7,811
Adj. Bal.	$2,318				Adj. Bal.			$33,112
Prepaid insurance					Salaries payable
Unadj. Bal.	$15,197				Unadj. Bal.			$0
		a	$2,674				g	$400
Adj. Bal.	$12,523				Adj. Bal.			$400
Prepaid rent					Unearned training fees
Unadj. Bal.	$2,027				Unadj. Bal.			$14,500
		h	$2,027		e	$5,800
Adj. Bal.	$0				Adj. Bal.			$8,700
Professional library					Common stock
Unadj. Bal.	$30,391				Unadj. Bal.			$14,000
Adj. Bal.	$30,391				Adj. Bal.			$14,000
Accumulated depreciation-Professional library					Retained earnings
Unadj. Bal.			$9,119		Unadj. Bal.			$50,431
		d	$5,349
Adj. Bal.			$14,468		Adj. Bal.			$50,431
Tuition fees earned					Dividends
Unadj. Bal.			$103,332		Unadj. Bal.	$40,523
		f	$7,250
Adj. Bal.			$110,582		Adj. Bal.	$40,523
Training fees earned					Rent expense
Unadj. Bal.			$38,496		Unadj. Bal.	$22,297
		e	$5,800		h	$2,027
Adj. Bal.			$44,296		Adj. Bal.	$24,324
Depreciation expense-Professional library					Teaching supplies expense
Unadj. Bal.	$0				Unadj. Bal.	$0
d	$5,349				b	$7,811
Adj. Bal.	$5,349				Adj. Bal.	$7,811
Depreciation expense-Equipment					Advertising expense
Unadj. Bal.	$0				Unadj. Bal.	$7,092
c	$10,698
Adj. Bal.	$10,698				Adj. Bal.	$7,092
Salaries expense					Utilities expense
Unadj. Bal.	$48,628				Unadj. Bal.	$5,673
g	$400
Adj. Bal.	$49,028				Adj. Bal.	$5,673
Insurance expense
Unadj. Bal.	$0
a	$2,674
Adj. Bal.	$2,674

Adjusted Trial Balance:

WELLS TECHNICAL INSTITUTE
Adjusted Trial Balance
December 31,2018
Account title	Debit	Credit
Cash	$26,340
Accounts receivable	$7,250
Teaching Supplies	$2,318
Prepaid insurance	$12,523
Prepaid rent	$0
Professional library	$30,391
Accumulated depreciation-Professional library		$14,468
Equipment	$70,903
Accumulated Depreciation-Equipment		$26,908
Accounts payable		$33,112
Salaries payable		$400
Unearned training fees		$8,700
Common stock		$14,000
Retained earnings		$50,431
Dividends	$40,523
Tuition fees earned		$110,582
Training fees earned		$44,296
Depreciation expense-Professional library	$5,349
Depreciation expense-Equipment	$10,698
Salaries expense	$49,028
Insurance expense	$2,674
Rent expense	$24,324
Teaching supplies expense	$7,811
Advertising expense	$7,092
Utilities expense	$5,673
Total	$302,897	$302,897