1. Use the information to prepare adjusting entries as of 2. Prepare journal entries to record the first subsequent cash transaction in 2018 for parts c and e. Wells Technical Institute pay tuition directly to the school. WTI also offers training to groups in off-site (WTD, a school owned by Tristana Wells, provides training to individuals who Problem 3-3 financial statem trial balance as of December 31, 2017, follows. Descriptions of items a through h that require adjusting adjusted trial ba P1 P2 P3 entries on December 31, 2017, follow. 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 2017. . Annual depreciation on the equipment is $13,200. d. Annual depreciation on the professional library is $7,200. e. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fec of $2.500, 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 2018 October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,000 tuition per month payable at the end of the class. The class started on October 15, but no pay- has yet been received. (WTI's accruals are applied to the nearest half-month; for example, t. On ment 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. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 20127 Debit Credit 5 34,000 3 Cash 4 Accounts receivable S Teaching supplies 6 Prepaid insurance 7 Prepaid rent 8 Professional library 8,000 12,000 3,000 35,000 Accumulated depreciation-Professional library 10 Equipment 11 Accumulated depreciation-Equipment 2 Accounts payable 80,000 15,000 26,000 Salaries payable 14 Unearned training fees 15 Common stock 6 Retained earnings 17 Dividends 18 Tuition fees earned 19 Training fees earned 20 Depreciation expense-Professional library 21 Depreciation expense-Equipment 22 Salaries expense 23 Insurance expense 24 Rent expense 25 Teaching supplies expense 26 Advertising expense 27 Utilities expense 28 Totals 12,500 10,000 80,000 50,000 123,900 40,000 50,000 6,000 $317,400 $317.400
