Question
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
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[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 $2,542 of coverage has expired.
- An inventory count shows that teaching supplies costing $2,204 are available at year-end.
- Annual depreciation on the equipment is $10,170.
- Annual depreciation on the professional library is $5,085.
- 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, $5,248 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 | $ 28,151 | |
Accounts receivable | 0 | |
Teaching supplies | 10,826 | |
Prepaid insurance | 16,242 | |
Prepaid rent | 2,166 | |
Professional library | 32,481 | |
Accumulated depreciationProfessional library | $ 9,746 | |
Equipment | 104,000 | |
Accumulated depreciationEquipment | 17,325 | |
Accounts payable | 24,000 | |
Salaries payable | 0 | |
Unearned revenue | 14,500 | |
T. Wells, Capital | 109,464 | |
T. Wells, Withdrawals | 43,310 | |
Tuition revenue | 110,438 | |
Training revenue | 41,143 | |
Depreciation expenseProfessional library | 0 | |
Depreciation expenseEquipment | 0 | |
Salaries expense | 51,972 | |
Insurance expense | 0 | |
Rent expense | 23,826 | |
Teaching supplies expense | 0 | |
Advertising expense | 7,579 | |
Utilities expense | 6,063 | |
Totals | $ 326,616 | $ 326,616 |
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.
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