Preparing adjusting entries, adjusted trial balance, and financial statements 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, 2008, follows. WTI initially records prepaid expenses in balance sheet accounts. Descriptions of items a through f that require adjusting entries on December 31, 2008, follow.
Additional Information

a. An analysis of the school’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 2008.

c. Annual depreciation on the equipment is \($13,200.\)

d. Annual depreciation on the professional library is \($7,200.\)

e. The school’s two employees are paid weekly. As of the end of the year, two days’ wages have accrued at the rate of \($100\) per day for each employee.

f. The balance in the Prepaid Rent account represents rent for December.

Required 

I. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance.
2. Prepare the necessary adjusting journal entries for items a through f and post them to the T-accounts.
Assume that adjusting entries are made only at year-end.

3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance.
4. Prepare Wells Technical Institute’s income statement and statement of owner’s equity forthe year 2008 and prepare its balance sheet as of December 31, 2008.

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Microsoft Event Book! the Ed View Insert Format Took Data Accounting Window 2 3 Cash Accounts receivable 5 Teaching supplies WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2008 6 Prepaid insurance 7 Prepaid rent 8 Professional library Accumulated depreciation-Professional library 10 Equipment 11 Accumulated depreciation-Equipment 12 Accounts payable 13 Salaries payable 14 T. Wells, Capital 15 T. Wells, Withdrawals 16 Tuition fees earned 17 Training fees earned 18 Depreciation expense-Professional library 19 Depreciation expense-Equipment 20 Salaries expense 21 Insurance expense 22 Rent expense 23 Teaching supplies expense 24 Advertising expense 25 Utilities expense 26 Totals 27 Debit Credit $ 34,000 0 8,000 12,000 3,000 35,000 $ 10,000 80,000 15,000 38,500 0 90,000 50,000 123,900 40,000 0 50,000 0 33,000 0 6,000 6,400 $ 317,400 $ 317,400