December 31 Credit Debit $ 26,189 0 10,071 15, 110 2,015 30,217 $ 9,066 70,500 Cash recounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation Professional library Equipment Accumulated depreciation- Equipment Accounts payable Salaries payable Unearned training fees T. Wells, Capital T. Wells, withdrawals Tuition fees carned Training fees earned Depreciation expense- Professional library Depreciation expense Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 16, 117 32,340 0 15,000 64,062 40,291 102,740 38,275 0 0 48,350 0 22,165 0 7,051 5,641 $277,600 $277,600 Problem 3-3A Part 1 Required: . Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at Hear-end. View transaction list View journal entry worksheet No Transaction General Journal 1 Insurance expense Prepaid insurance Credit Debit 3,664 3,864 b. Teaching supplies expense Teaching supplies c. 15.458 Depreciation expense-Equipment Accumulated depreciation Equipment 15,458 4 d. Depreciation expense-Professional library 7,729 Accumulated depreciation Professional library 7,729 5 e. 7,500 Unearned training fees Training fees eamed 7,500 6 f. 11,500 Accounts receivable Tuition fees earned 11,500 Salaries expense Salaries payable 8 h. Rent expense Prepaid rent Required Information Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P6 (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. WTI Initially records prepaid expenses and unearned revenues in balance sheet accounts. Its unadjusted trial balance as of December 31 follows along with descriptions of items a through h that require adjusting entries on December 31. Additional Information Items a. An analysis of WTI's Insurance policies shows that $3,864 of coverage has expired. b. An Inventory count shows that teaching supplies costing $3,349 are available at year-end. C. Annual depreciation on the equipment is $15,458. d. Annual depreciation on the professional library is $7,729. e. On September 1, WTI agreed to do five courses for a client for $3,000 each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $15,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. f. On October 15, WTI agreed to teach a four-month class (beginning immediately for an executive with payment due at the end of the class. At December 31, $11,500 of the tuition has been earned by WTI. 9. 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 Debit Credit Cash $ 26,189 Accounts receivable 0 Teaching supplies 10,071 Prepaid insurance 15, 110 Prepaid rent 2,015 Professional library 30,217 Accumulated depreciation $ 9,066 Professional library Equipment 70,500 Accumulated depreciation 16,117 Equipment Accounts payable 32,340 Salaries payable 0 Unearned training fees 15,000 T. Wells, Capital 64,062 T. Wells, withdrawala 40, 291 Tuition fee earned 102,740 Training fees earned 38,275 Depreciation expense- 0 Professional library Depreciation expense Equipment 0 Salaries expense 48,350 Insurance expense 0 Rent expense 22,165 Teaching supplies expense 0 Advertising expense 7,051 utilities expense 5.641 Totals $277,600 $277,600
