Required information Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P6 (The following information applies to the questions displayed below.) Wells Technical Institute (WT), a school owned by Tristana Wells, provides training to individuals who pay tultion 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 that require adjusting entries on December 31. Additional Information Items a. An analysis of Wil's insurance policies shows that $3,864 of coverage has expired. b. An inventory count shows that teaching supplies costing $3,349 are available at year-end. c. Annual depreciation on the equipment is $15,458. d. Annual depreciation on the professional library is $7,729. e. On September 1, WTI agreed to do five courses for a client for $3,000 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 $15,000 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, $11,500 of the tuition has been earned by WTI. 9. 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. Credit $ 9,066 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Cash $ 26,199 Accounts receivable 0 Teaching supplies 10,071 Prepaid insurance 15, 110 Prepaid rent 2,015 Professional library 30,217 Accumulated depreciation- Professional library Equipment 70,500 Accumulated depreciation Equipment Accounts payable Salaries payable Unearned training fees T. Wells, Capital T. Wells, withdrawala 40,291 Tuition fees carned Training fees earned Depreciation expense- 0 Professional library Depreciation expense Equipment 0 Salaries expense 48,350 Insurance expense 0 Rent expense 22,165 Teaching supplies expense 0 Advertising expense 7,051 Utilities expense 5,641 Totals $277,600 16, 117 32,340 0 15,000 64,062 102,740 38,275 $277,600 Problem 3-3A Part 2 Reg 2A Reg 2B Post the balance from the unadjusted trial balance and the adjusting entries in to the T- accounts. Unadi. Bal. Cash 26.189 Unadi Equipment 70,500 Bal. Adj. Bal 26.189 Adj. Bal. 70.500 Accounts Receivable Unadi. Bal. Accumulated Depreciation- Equipment Unadi 16.117 Bal. fc Adj. Bal. 0 Adj. Bal. 16.117 Teaching Supplies Accounts Payable Unadi. Bal. Unadi Bal b Adj. Bal 0 Adj. Bal. 0 Salaries Payable Unadi. Bal. Prepaid Insurance 15,110 Unadj. Bal. 400 Adj. Bal. 15,110 Adj. Bal. 400 Unadi. Prepaid Rent 2.015 Bal. Unearned Training Fees Unadi Bal. 2,015 e Adj. Bal 0 Adj. Bal. T. Wells, Capital Unadi. Bal. Professional Library 30,217 Unadi Bal. Adj. Bal. 30,217 Adj. Bal 0 T. Wells, Withdrawals Accumulated Depreciation- Professional Library Unadi. Bal. 9,066 Unadi. Bal. 40.291 Adj. Bal. 9,066 Adj. Bal. 40,291 Tuition Fees Earned Unadj. Bal. 102,740 Unad Bal. h Rent Expense 22,165 2,015 Adj. Bal. 102,740 Adj. Bal. 24.180 Training Fees Earned Unadi. 38,275 Teaching Supplies Expense Unadj. Bal. b Bal. le Adj. Bal. 38,275 Adj. Bal. Advertising Expense Depreciation Expense-Professional Library Unadi. Bal. C Unadi. Bal. 7.051 Adj. Bal. Adj. Bal. 7,051 Depreciation Expense-Equipment Unadi. Bal. C Unadj. Bal. Utilities Expense 5.641 Adj. Bal. Adj. Bal. 5.641 Insurance Expense Unadi. Bal. 9 Salaries Expense 48,350 Unadi Bal. a Adj. Bal. 48,350 Adj. Bal. Reg 2A Reg 2B Prepare an adjusted trial balance. WELLS TECHNICAL INSTITUTE Adjusted Trial Balance December 31 Debit Credit Cash $ 26,189 Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library 30,217 Accumulated depreciation- Professional library Equipment 70,500 Accumulated depreciation- Equipment Accounts payable 32,340 Salaries payable Unearned training fees T. Wells, Capital 64,062 T. Wells, Withdrawals 40.291 Tuition fees earned Training fees earned Depreciation expense- Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense 7.051 Utilities expense 5,641 Totals $ 179,889 S 96,402