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

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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 itemsathroughhthat require adjusting entries on December 31, 2017, follow.

Additional Information Items

1. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,433 are available at year-end 2017.
3. Annual depreciation on the equipment is $11,227.
4. Annual depreciation on the professional library is $5,614.
5. 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 $2,300, 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.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,219 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.)
7. 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.
8. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE

Unadjusted Trial Balance

December 31, 2017DebitCreditCash$27,245Accounts receivable0Teaching supplies10,478Prepaid insurance15,719Prepaid rent2,097Professional library31,436Accumulated depreciationProfessional library$9,432Equipment73,338Accumulated depreciationEquipment16,768Accounts payable37,749Salaries payable0Unearned training fees11,500Common stock12,000Retained earnings54,646Dividends41,916Tuition fees earned106,885Training fees earned39,820Depreciation expenseProfessional library0Depreciation expenseEquipment0Salaries expense50,300Insurance expense0Rent expense23,067Teaching supplies expense0Advertising expense7,336Utilities expense5,868Totals$288,800$288,800

Problem 3-3A Part 2

2-a.Post the balance from the unadjusted trial balance and the adjusting entries in to theT-accounts.

2-b.Prepare an adjusted trial balance.