Required information 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 An analysis of WTI's insurance policies shows that $3,732 of coverage has expired An inventory count shows that teaching supplies costing $3,235 are available at year end Annual depreciation on the equipment is $14,929 Annual depreciation on the professional library is $7,464 On September 1, WTI agreed to do five courses for a client for $2,400 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 $12,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees 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, $12,350 of the tuition has been earned by WTI 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 Problem 3 3A Part 3 3 a Prepare Wells Technical Institute's income statement for the year 3 b Prepare Wells Technical Institute's statement of retained earnings for the year The Retained Earnings account balance was $78,000 on December 31 of the prior year 3 c Prepare Wells Technical Institute's balance sheet as of December 31 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Credit Debit 27,698 $ 10,652 15,981 2,132 31,958 $ 9,589 104,000 17,046 26,000 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 12,000 31,267 78,000 42,613 108,661 40,482 51,136 23,452 7,457 5,966 $ 323,045 $323,045

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

Required information

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

An analysis of WTI's insurance policies shows that $3,732 of coverage has expired.
An inventory count shows that teaching supplies costing $3,235 are available at year-end.
Annual depreciation on the equipment is $14,929.
Annual depreciation on the professional library is $7,464.
On September 1, WTI agreed to do five courses for a client for $2,400 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 $12,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees.
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, $12,350 of the tuition has been earned by WTI.
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.

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Problem 3-3A Part 3

3-a. Prepare Wells Technical Institute's income statement for the year. 3-b. Prepare Wells Technical Institute's statement of retained earnings for the year. The Retained Earnings account balance was $78,000 on December 31 of the prior year. 3-c. Prepare Wells Technical Institute's balance sheet as of December 31.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Credit Debit 27,698 $ 10,652 15,981 2,132 31,958 $ 9,589 104,000 17,046 26,000 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 12,000 31,267 78,000 42,613 108,661 40,482 51,136 23,452 7,457 5,966 $ 323,045 $323,045