Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO A1, P1, P2, P3 [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. Its unadjusted trial balance as of December 31, 2017, 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, 2017, follow. Additional Information Items

An analysis of WTI's insurance policies shows that $2,939 of coverage has expired. An inventory count shows that teaching supplies costing $2,547 are available at year-end 2017. Annual depreciation on the equipment is $11,756. Annual depreciation on the professional library is $5,878. 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 $2,200, 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. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,580 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.) 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. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2017 Debit Credit Cash $ 28,000 Accounts receivable 0 Teaching supplies 10,768 Prepaid insurance 16,155 Prepaid rent 2,155 Professional library 32,307 Accumulated depreciationProfessional library $ 9,693 Equipment 75,368 Accumulated depreciationEquipment 17,232 Accounts payable 39,613 Salaries payable 0 Unearned training fees 11,000 T. Wells, Capital 68,493 T. Wells, Withdrawals 43,078 Tuition fees earned 109,846 Training fees earned 40,923 Depreciation expenseProfessional library 0 Depreciation expenseEquipment 0 Salaries expense 51,694 Insurance expense 0 Rent expense 23,705 Teaching supplies expense 0 Advertising expense 7,539 Utilities expense 6,031 Totals $ 296,800 $ 296,800

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Problem 3-3A Part 1 Required: 1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end.

Transactions: 1An analysis of WTI's insurance policies shows that $2,939 of coverage has expired. 2An inventory count shows that teaching supplies costing $2,547 are available at year-end 2017. 3Annual depreciation on the equipment is $11,756. 4Annual depreciation on the professional library is $5,878. 5On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,200, 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. 6On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,580 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.) 7WTI'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. 8The balance in the Prepaid Rent account represents rent for December.

Fill in journals:

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2017 Debit Credit Cash 28,000 Accounts receivable 10,768 16,155 2,155 32,307 Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation-Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable 9,693 75,368 17,232 39,613 0 Unearned training fees T. Wells, Capital T. Wells, Withdrawals Tuition fees earned 11,000 68,493 43,078 109,846 Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense 40,923 51,694 Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense 23,705 7,539 6,031 $ 296,800 $296,800 Totals Journal entry worksheet 1 4 8 2 3 5 6 7 An analysis of WTI's insurance policies shows that $2,939 of coverage has expired Note: Enter debits before credits. Transaction General Journal Debit Credit . Record entry Clear entry View general journal