Question
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
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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 $3,468 of coverage has expired.
- An inventory count shows that teaching supplies costing $3,006 are available at year-end.
- Annual depreciation on the equipment is $13,871.
- Annual depreciation on the professional library is $6,936.
- 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.
- 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, $9,798 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.
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.
Prepare Wells Technical Institute's income statement for the year.
WELLS TECHNICAL INSTITUTEIncome StatementFor Year Ended December 31 $0 0
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.
WELLS TECHNICAL INSTITUTEStatement of Retained EarningsFor Year Ended December 31Retained earnings, December 31 prior year end 0 Retained earnings, December 31 current year end$0
Prepare Wells Technical Institute's balance sheet as of December 31. Note: Include all balance sheet accounts, even those with zero balances.
WELLS TECHNICAL INSTITUTEBalance SheetDecember 31 0 0 $0 0 0 $0
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