Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribed

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, 2018, 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, 2018, follow. Additional Information Items a. An analysis of WTI's insurance policies shows that $3,071 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,662 are available at year-end 2018 c. Annual depreciation on the equipment is $12,285 d. Annual depreciation on the professional library is $6,142 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 2019. f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $3,240 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 $100 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, 2018 Debit Credit $ 26,642 Cash Accounts receivable 0 Teaching supplies Prepaid insurance Prepaid rent Professional library 10,245 15,371 2,050 30,739 Accumulated depreciation-Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable 9,223 71,718 16,396 34,159 0 Unearned training fees Common stock 14,000 11,000 54,169 Retained earnings, December 31, 2017 Dividends 40,988 Tuition fees earned 104,516 Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense 38,937 0 0 49,186 0 Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense 22,550 0 7,173 5,738 282,400 $282,400 Totals Required: 2. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end. View transaction list Journal entry worksheet 6 8 1 2 3 4 5 7 An analysis of WTI's insurance policies shows that $3,071 of coverage has expired Note: Enter debits before credits. Transaction General Journal Debit Credit a Record entry Clear entry View general journal

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The People Policies Audit

Authors: Maurice A. Phelps

1st Edition

1907766049, 978-1907766046

More Books

Students also viewed these Accounting questions