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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
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[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
- An analysis of WTI's insurance policies shows that $4,129 of coverage has expired.
- An inventory count shows that teaching supplies costing $3,578 are available at year-end.
- Annual depreciation on the equipment is $16,515.
- Annual depreciation on the professional library is $8,258.
- On September 1, WTI agreed to do five training courses for a client for $2,500 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 $12,500 cash in advance for all five training 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, $14,050 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 | $ 27,547 | |
Accounts receivable | 0 | |
Teaching supplies | 10,594 | |
Prepaid insurance | 15,894 | |
Prepaid rent | 2,120 | |
Professional library | 31,784 | |
Accumulated depreciationProfessional library | $ 9,537 | |
Equipment | 102,000 | |
Accumulated depreciationEquipment | 16,954 | |
Accounts payable | 22,000 | |
Salaries payable | 0 | |
Unearned revenue | 12,500 | |
Common stock | 35,527 | |
Retained earnings | 75,000 | |
Dividends | 42,381 | |
Tuition revenue | 108,069 | |
Training revenue | 40,261 | |
Depreciation expenseProfessional library | 0 | |
Depreciation expenseEquipment | 0 | |
Salaries expense | 50,858 | |
Insurance expense | 0 | |
Rent expense | 23,320 | |
Teaching supplies expense | 0 | |
Advertising expense | 7,417 | |
Utilities expense | 5,933 | |
Totals | $ 319,848 | $ 319,848
|
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