Martin Technical Institute (MTI), a school owned by Lindsey Martin, provides training to individuals who pay tuition directly to the school. MTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, is found on the trial balance tab. MTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31.

1. An analysis of MTI's insurance policies shows that $2,400 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,240 are available at year-end.
3. Annual depreciation on the equipment is $5,400.
4. Annual depreciation on the professional library is $10,200.
5. On September 1, MTI agreed to do five courses for a client for $2,600 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 $13,000 cash in advance for all five courses on September 1, and MTI credited Unearned Training Fees.
6. On October 15, MTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $9,500 of the tuition has been earned by MTI.
7. MTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $220 per day for each employee.
8. The balance in the Prepaid Rent account represents rent for December.

General Journal:

1 Insurance expense DB 2,400

Prepaid insurance CR 2,400

2 Teaching supplies expense DB 5,310

Teaching supplies CR 5,310

3 Depreciation expense - Equipment DB 5,400

Accumulated depreciation - Equipment CR 5,400

4 Depreciation expense - Professional library DB 10,200

Accumulated depreciation - Professional library CR 10,200

5 Unearned training fees DB 5,200

Training fees earned CD 5,200

6 Accounts receivable DB 9,500

Tuition fees earned CR 9,500

7 Salaries expense DB 880

Salaries payable CR 880

8 Rent expense DB 3,800

Prepaid rent CR 3,800

Adjusted Income Statement:

Year Ended December 31

Revenues

Tuition fees earned $136,500

Training fees earned 50,700

Total revenues $187,200

Expenses

Depreciation expense - Professional library 10,200

Depreciation expense - Equipment 5,400

Salaries expense 51,680

Insurance expense 2,400

Rent expense 45,600

Teaching supplies expense 5,310

Advertising expense 6,000

Utilities expense 6,950

Total expenses 133,540

Net income $53,660

Owner's Equity

For Year Ended December 31

L. Martin, Capital, December 31 prior year end $92,000

Add: Net income 53,660

Less: Withdrawals by owner (53,300)

L. Martin, Capital, December 31 current year end $92,360

Balance Sheet December 31

Assets

Current assets

Cash $54,900

Accounts receivable 9,500

Teaching supplies 3,240

Prepaid insurance 7,200

Prepaid rent 0

Total current assets$74,840

Plant assets $0

Accumulated depreciation - Professional library (30,600)

Accumulated depreciation - Equipment (16,200)

= (46,800)

Total assets $28,040

Liabilities

Current liabilities

Accounts payable $32,000

Salaries payable 880

Unearned training fees 7,800

Total liabilities $40,680

Equity

L. Martin, Capital 92,360

Total equity 92,360

Total Liabilities & Equity $133,040

Account affecting the:Impact on net income

Adjusting entry related to: Income statement Balance Sheet

a. Insurance Insurance expense Prepaid insurance $?

b. Teaching supplies Teaching supplies expense Teaching supplies $?

c. Depreciation - equipment Dep. expense - Equip Acc. depreciation - Equipment

d. Depreciation - library Dep. expense - library Acc. depreciation - library

e. Training fees Training fees earned Unearned training fees

f. Tuition Tuition fees earned

g. Salaries Salaries expense Salaries payable

h. Rent Rent expense Prepaid rent

Total impact on income due to adjustments $

Net income before adjustments

Net income after adjustments