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

1. An analysis of WTI's insurance policies shows that $3,732 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,235 are available at year-end.
3. Annual depreciation on the equipment is $14,929.
4. Annual depreciation on the professional library is $7,464.
5. 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.
6. 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.
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.

The adjusting entries are:

Date________General Journal_______________________Debit______Credit

a)

Dec 31........Insurance expense.............................................3,732

..........................Prepaid insurance.............................................................3,732

b)

Dec 31........Teaching supplies expense..................................7,417

...........................Teaching supplies.............................................................7,417

c)

Dec 31........Depreciation expenseEquipment....................14,929

..........................Accumulated depreciationEquipment...........................14,929

d)

Dec 31........Depreciation expenseProfessional library..........7,464

.........................Accumulated depreciationProfessional library.................7,464

e)

Dec 31.........Unearned training fees.........................................4,800

............................Training fees earned.......................................................4,800

f)

Dec 31........Accounts receivable..............................................12,350

..........................Tuition fees earned............................................................12,350

g)

Dec 31.........Salaries expense.....................................................400

...........................Salaries payable...................................................................400

h)

Dec 31..........Rent expense......................................................2,132

...........................Prepaid rent.......................................................................2,132

Problem 3-3A Part 2

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

Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Credit $ 27,698 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 10,652 15,981 2,132 31,958 9,589 104,000 17,046 26,000 12,000 31,267 78,000 Dividends 42,613 Tuition fees earned 108,661 40,482 Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense 51,136 23,452 Rent expense Teaching supplies expense Advertising expense Utilities expense 7,457 5,966 $ 323,045 $323,045 Totals