Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information Skip to question [The following information applies to the questions displayed below.] Wells Technical Institute (WTI) provides training to individuals who pay tuition

Required information

Skip to question

[The following information applies to the questions displayed below.] Wells Technical Institute (WTI) 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 $3,600 of coverage has expired.
  2. An inventory count shows that teaching supplies costing $3,120 are available at year-end.
  3. Annual depreciation on the equipment is $14,400.
  4. Annual depreciation on the professional library is $7,200.
  5. On September 1, WTI agreed to do five training courses for a client for $2,900 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 $14,500 cash in advance for all five training courses on September 1, and WTI credited Unearned Revenue.
  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, $10,450 of the tuition revenue 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.
WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31
Debit Credit
Cash $ 26,340
Accounts receivable 0
Teaching supplies 10,129
Prepaid insurance 15,197
Prepaid rent 2,027
Professional library 30,391
Accumulated depreciationProfessional library $ 9,119
Equipment 96,000
Accumulated depreciationEquipment 16,210
Accounts payable 22,000
Salaries payable 0
Unearned revenue 14,500
Common stock 22,640
Retained earnings 78,000
Dividends 40,523
Tuition revenue 103,332
Training revenue 38,496
Depreciation expenseProfessional library 0
Depreciation expenseEquipment 0
Salaries expense 48,628
Insurance expense 0
Rent expense 22,297
Teaching supplies expense 0
Advertising expense 7,092
Utilities expense 5,673
Totals $ 304,297 $ 304,297

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.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Palgrave Handbook Of Government Budget Forecasting

Authors: Daniel Williams, Thad Calabrese

1st Edition

3030181944, 978-3030181949

More Books

Students also viewed these Finance questions