a. e. 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, 2015, 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, 2015, follow. 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 2015. C. Annual depreciation on the equipment is $13,200. d. Annual depreciation on the professional library is $7,200. 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 $2,500, 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 2016. f. On 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 payment has yet been received. (WTl'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. Show les Unadjusted Dates: Dec 31 to: Dec 31 Account affecting the: Impact on net income Adjusting entry related to: Income statement Balance Sheet a. Insurance b. Teaching supplies c. Depreciation - equipment d. Depreciation - library e. Training fees f. Tuition g. Salaries $ 0 h. Rent Total impact on income due to adjustments Net income before adjustments Net income after adjustments 0 Balance Sheet Impact on income Journal entry worksheet 1 2 3 4 5 6 7 8 s insurance policies shows that $2,400 of coverage has a. An analysis of WTI expired. Note: Enter debits before credits. Date Account Title Debit Credit Dec 31 Record entry Clear entry View general journal Wells Technical Institute Trial Balance December 31, 2015 Account Title Debit Credit Cash $ 34,000 8,000 12,000 3,000 35,000 Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation - Professional library Equipment Accumulated depreciation - Equipment Accounts payable 10 80,000 15 26 Wells Technical Institute Income Statement For Year Ended December 31, 2015 $ 0 0 0 O 0 0 0 0 0 0 0 0 0 Net income Unadjusted Wells Technical Institute Statement of Retained Earnings For Year Ended December 31, 2015 Retained earnings, December 31, 2014 $ 80,000 Add: Net income Less: Dividends (50,000) 30,000 Retained earnings, December 31, 2015 $ Wells Technical Institute Income Statement For Year Ended December 31, 2015 $ 0 0 0 O 0 0 0 0 0 0 0 0 0 Net income Unadjusted Wells Technical Institute Statement of Retained Earnings For Year Ended December 31, 2015 Retained earnings, December 31, 2014 $ 80,000 Add: Net income Less: Dividends (50,000) 30,000 Retained earnings, December 31, 2015 $
