3.34 bi balance and P3 N PS Chapter 3 Adusting Acc Welly Technical Institute (WTD, a school owned by Tristana Wells, provides training to individuals who arial balance as of December 31 follows, along with descriptions of items a through h that require adjust- pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted ing entries on December 31. Additional Information b. An inventory count shows that teaching supplies costing $2.800 are available at year-end. a. An analysis of WTT's insurance policies shows that $2,400 of coverage has expired. Annual depreciation on the equipment is $13,200 d. Annual depreciation on the professional library is $7,200. e. On September 1, WTI agreed to do five training courses for a client for $2.500 each. Two courses will client paid $12.500 cash in advance for all five training courses on September 1, and WTI credited start immediately and finish before the end of the year. Three courses will not begin until next year. The Unearned Revenue. WTT's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with pay- ment due at the end of the class. At December 31, $7,500 of the tuition revenue has been earned by WTI. 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 Cash Accounts receivable Teaching supplies Debit $34.000 Credit 8,000 Prepaid insurance 12.000 Prepaid rent 3,000 Professional library Accumulated depreciation-Professional library 35.000 Equipment Accumulated depreciation-Equipment 80.000 $10,000 Accounts payable Salaries payable 15,000 26,000 0 Unearned revenue 12.500 T Wells, Capital 90,000 Wells, Withdrawals 50,000 Tuition revenue 123,900 Training revenue Depreciation expense-Professional library 40,000 0 Depreciation expense-Equipment- 0 Salaries expense 50.000 Insurance expense Rent expense 33,000 Teaching supplies expense Advertising expense Utilities expense Totals 6,000 6,400 $317,400 $317,400 Required 1. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance. 2. Prepare the necessary adjusting journal entries for items a through h 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 for the year and prepare its balance sheet as of December 31. The T. Wells, Capital account balance was $90,000 on December 31 of the prior year, and there were no owner investments in the current year.