Problem 3 3A Preparing adjusting entries, adjusted trial balance, and financial statements LO A1, P1, P2, P3 Skip to question 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 $2,674 of coverage has expired An inventory count shows that teaching supplies costing $2,318 are available at year end 2017 Annual depreciation on the equipment is $10,698 Annual depreciation on the professional library is $5,349 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 $3,061 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 $ 27,547 Accounts receivable 0 Teaching supplies 10,594 Prepaid insurance 15,894 Prepaid rent 2,120 Professional library 31,784 Accumulated depreciationProfessional library $ 9,537 Equipment 74,152 Accumulated depreciationEquipment 16,954 Accounts payable 38,794 Salaries payable 0 Unearned training fees 11,000 T Wells, Capital 67,385 T Wells, Withdrawals 42,381 Tuition fees earned 108,069 Training fees earned 40,261 Depreciation expenseProfessional library 0 Depreciation expenseEquipment 0 Salaries expense 50,858 Insurance expense 0 Rent expense 23,320 Teaching supplies expense 0 Advertising expense 7,417 Utilities expense 5,933 Totals $ 292,000 $ 292,000 Problem 3 3A Part 3 3 a Prepare Wells Technical Institute's income statement for the year 2017 3 b Prepare Wells Technical Institute's statement of owner's equity for the year 2017 3 c Prepare Wells Technical Institute's balance sheet as of December 31, 2017

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Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO A1, P1, P2, P3 Skip to question [The following information applies to the

Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO A1, P1, P2, P3

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[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 $2,674 of coverage has expired.
An inventory count shows that teaching supplies costing $2,318 are available at year-end 2017.
Annual depreciation on the equipment is $10,698.
Annual depreciation on the professional library is $5,349.
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 $3,061 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	$	27,547
Accounts receivable		0
Teaching supplies		10,594
Prepaid insurance		15,894
Prepaid rent		2,120
Professional library		31,784
Accumulated depreciationProfessional library			$	9,537
Equipment		74,152
Accumulated depreciationEquipment				16,954
Accounts payable				38,794
Salaries payable				0
Unearned training fees				11,000
T. Wells, Capital				67,385
T. Wells, Withdrawals		42,381
Tuition fees earned				108,069
Training fees earned				40,261
Depreciation expenseProfessional library		0
Depreciation expenseEquipment		0
Salaries expense		50,858
Insurance expense		0
Rent expense		23,320
Teaching supplies expense		0
Advertising expense		7,417
Utilities expense		5,933
Totals	$	292,000	$	292,000

Problem 3-3A Part 3

3-a. Prepare Wells Technical Institute's income statement for the year 2017. 3-b. Prepare Wells Technical Institute's statement of owner's equity for the year 2017. 3-c. Prepare Wells Technical Institute's balance sheet as of December 31, 2017.