Required information

Skip to question

$[$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 training courses for a client for $$2,300$ each. Two courses will start immediately and finish before the end of the year. Three courses will not begin until next year. The client paid $$11,500$ cash in advance for all five training courses on September $1,$ and WTI credited Unearned Revenue.

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 $31,$ $$9,350$ of the tuition revenue has been earned by WTI.

g$.$ 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.

WELLS TECHNICAL INSTITUTE

Unadjusted Trial Balance

December $31$

Debit Credit

Cash $ $26,189$

Accounts receivable $0$

Teaching supplies $10,071$

Prepaid insurance $15,110$

Prepaid rent $2,015$

Professional library $30,217$

Accumulated depreciation$$Professional library $ $9,066$

Equipment $100,000$

Accumulated depreciation$$Equipment $16,117$

Accounts payable $23,000$

Salaries payable $0$

Unearned revenue $11,500$

T$.$ Wells, Capital $106,402$

T$.$ Wells, Withdrawals $40,291$

Tuition revenue $102,740$

Training revenue $38,275$

Depreciation expense$$Professional library $0$

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 $ $307,100$ $ $307,100$

$2-$a$.$ Post the balance from the unadjusted trial balance and the adjusting entries into the T$-$accounts. $($should be labiled as: cash, equipmet, accounts recievable, accumulated depreciation equipment, teaching supplies, accounts payable, prepaid insurance salaries payable, prepaid rent, unearned revenue, professional library, T$-$Wells capital, acumulated depriciation$-$ professional library, T$-$Wells withdrawls, tuition revenue, rent expense, training revenue, teaching supplies expense, deprecciation expense$-$professional library, advertising expense, depreciation expense$-$equipment, utilities expense, salaries expense, insurance expense. $)$

$2-$b$.$ Prepare an adjusted trial balance.