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Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P5, P6 [The following information applies to the

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Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P5, 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 $2,674 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,318 are available at year-end. c. Annual depreciation on the equipment is $10,698. d. Annual depreciation on the professional library is $5,349. e. On September 1, WTI agreed to do five courses for a client for $2,300 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 $11,500 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, $7,403 of the tuition has been earned by WTI. 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. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Cash Accounts receivable Teaching supplies Debit $ 28,151 Credit 0 10,826 Prepaid insurance 16,242 Prepaid rent 2,166 Professional library 32,481 Accumulated depreciation-Professional library $ 9,746 Equipment 96,000 Accumulated depreciation-Equipment 17,325 Accounts payable 21,000 Salaries payable 0 Unearned training fees 11,500 Common stock 27,464 Retained earnings 80,000 Dividends 43,310 Tuition fees earned 110,438 Training fees earned 41,143 Depreciation expense-Professional library 0 Depreciation expense-Equipment 0 Salaries expense 51,972 Insurance expense Rent expense Advertising expense Utilities expense Totals 23,826 Teaching supplies expense 7,579 6,063 $ 318,616 $318,616

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