Required information {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. Its unadjusted trial balance as of December 31, 2013, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2013, follow Additional Information Items a. An analysis of WTI's insurance policies shows that $2,550 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,950 are available at year- end 2013. c. Annual depreciation on the equipment is $13,500. d. Annual depreciation on the professional library is $7,500. e. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,800, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2014 f. On October 15, WTI agreed to teach a four- month class (beginning immediately) for an individual for $3,300 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.) g. WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $130 per day for each employee. h. The balance in the Prepaid Rent account represents rent for December WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2013 Debit Credit Cash $37.000 Accounts receivable 0 0 Teaching supplies 8,300 Prepaid insurance 12,300 Prepaid rent 3,300 38.000 Professional library Accumulated depreciation- $ 10,300 Professional library 83,000 Equipment Accumulated depreciation-Equipment 15,300 Accounts payable 29,300 Salarles payable 0 Unearned training fees 14.000 Common stock Retained earnings 83.000 53,000 Dividends Tuition fees eamed 127,500 Training fees earned 43,000 Depreciation expense-Professional 0 library Depreciation expense-Equipment 0 53,000 Salaries expense Insurance expense 0 34,500 Rent expense Teaching supplies expense 0 Advertising expense 6,300 Utilities expense 6,700 13.000 $3,000 Totals 335,400 $335.400 $ 4.1 Prepare Wells Technical Institute's income statement for the year 2013. WELLS TECHNICAL INSTITUTE Income Statement For Year Ended December 31, 2013 4.2 Prepare a statement of retained earnings for the year 2013. WELLS TECHNICAL INSTITUTE Statement of Retained Earnings For Year Ended December 31, 2013 4.3 Prepare Wells Technical Institute's balance sheet as of December 31, 2013. WELLS TECHNICAL INSTITUTE Balance Sheet December 31, 2013
