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 $3,071 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,662 are available at year-end. c. Annual depreciation on the equipment is $12,285. d. Annual depreciation on the professional library is $6,142. e. On September 1, WTI 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 WTI credited Uneared Training Fees. 1. 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, $8,600 of the tuition has been earned by WTI. 9. Wil'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 Credit Debit $ 27, 396 10,536 15,886 2,108 31,610 $ 9,484 97,000 16,861 23,000 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional Library Accumulated depreciation-Professional Library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees Common stock Retained earnings Dividends Tuition fees earned Training fees earned Depreciation expense-Professional Library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 42,149 13,000 26,787 77,000 107,477 40,840 50,579 @ 23,188 7,376 5,901 $313,649 $313,649 vepreciation expense-ProTessional Library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 50,579 0 23,188 @ 7,376 5,901 $313,649 $313,649 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, View transaction list Journal entry worksheet Required information Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals e 50,579 @ 23,188 7,376 5,901 $313,649 $313,649 Problem 3-3A Part 2 2. Post the balance from the unadjusted trial balance and the adjusting entries in to the accounts 2.b. Prepare an adjusted trial balance Complete this question by entering your answers in the tabs below. Credit Req 2A Reg 28 Prepare an adjusted trial balance. WELLS TECHNICAL INSTITUTE Adjusted Trial Balance December 31 Debit Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation- Professional library Equipment Accumulated depreciation- Equipment Accounts payable Salaries payable Uneamed training fees Common stock Retained earnings Dividends Tuition fees earned Training fees earned Depreciation expense- Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals
