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 An analysis of WTI's insurance policies shows that $3,996 of coverage has expired An inventory count shows that teaching supplies costing $3,464 are available at year end Annual depreciation on the equipment is $15,986 Annual depreciation on the professional library is $7,993 On September 1, WTI agreed to do five 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 courses on September 1, and WTI credited Unearned Revenue 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, $13,903 of the tuition revenue 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 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Credit Cash $ 27,245 Accounts receivable 0 Teaching supplies 10,478 Prepaid insurance 15,719 Prepaid rent 2,097 Professional library 31,436 Accumulated depreciationProfessional library $ 9,432 Equipment 96,000 Accumulated depreciationEquipment 16,768 Accounts payable 23,000 Salaries payable 0 Unearned revenue 11,500 Common stock 24,057 Retained earnings 80,000 Dividends 41,916 Tuition revenue 106,885 Training revenue 39,820 Depreciation expenseProfessional library 0 Depreciation expenseEquipment 0 Salaries expense 50,300 Insurance expense 0 Rent expense 23,067 Teaching supplies expense 0 Advertising expense 7,336 Utilities expense 5,868 Totals $ 311,462 $ 311,462 1 Prepare the necessary adjusting journal entries for items a through h Assume that adjusting entries are made only at year end 2 a Post the balance from the unadjusted trial balance and the adjusting entries into the T accounts 2 b Prepare an adjusted trial balance 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 $80,000 on December 31 of the prior year 3 c Prepare Wells Technical Institute's balance sheet as of December 31

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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

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

An analysis of WTI's insurance policies shows that $3,996 of coverage has expired.
An inventory count shows that teaching supplies costing $3,464 are available at year-end.
Annual depreciation on the equipment is $15,986.
Annual depreciation on the professional library is $7,993.
On September 1, WTI agreed to do five 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 courses on September 1, and WTI credited Unearned Revenue.
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, $13,903 of the tuition revenue 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.

WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31
	Debit	Credit
Cash	$ 27,245
Accounts receivable	0
Teaching supplies	10,478
Prepaid insurance	15,719
Prepaid rent	2,097
Professional library	31,436
Accumulated depreciationProfessional library		$ 9,432
Equipment	96,000
Accumulated depreciationEquipment		16,768
Accounts payable		23,000
Salaries payable		0
Unearned revenue		11,500
Common stock		24,057
Retained earnings		80,000
Dividends	41,916
Tuition revenue		106,885
Training revenue		39,820
Depreciation expenseProfessional library	0
Depreciation expenseEquipment	0
Salaries expense	50,300
Insurance expense	0
Rent expense	23,067
Teaching supplies expense	0
Advertising expense	7,336
Utilities expense	5,868
Totals	$ 311,462	$ 311,462

1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end.

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

2-b. Prepare an adjusted trial balance.

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 $80,000 on December 31 of the prior year.

3-c. Prepare Wells Technical Institute's balance sheet as of December 31.