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. 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 a. An analysis of WTI's insurance policies shows that $2,400 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,800 are available at year-end. c. Annual depreciation on the equipment is $13,200. d. Annual depreciation on the professional library is $7,200. e. 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. f. 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, $7,500 of the tuition revenue has been earned by WTI. 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 Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation-Professional library Debit $ 34,000 0 8,000 12,000 3,000 35,000 Credit $ 10.000 S < Prev 5 of 5 Next > h. The balance in the Prepaid Rent account represents rent for December. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Cash Accounts receivable Teaching supplies Debit $ 34,000 Credit 0 8,000 Prepaid insurance 12,000 Prepaid rent 3,000 Professional library 35,000 Accumulated depreciation-Professional library $ 10,000 Equipment 80,000 Accumulated depreciation-Equipment 15,000 Accounts payable 26,000 Salaries payable 0 Unearned revenue 12,500 T. Wells, Capital T. Wells, Withdrawals Tuition revenue Training revenue Depreciation expense-Equipment Salaries expense 90,000 50,000 123,900 40,000 Depreciation expense-Professional library 0 0 50,000 0 Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 33,000 0 6,000 6,400 $ 317,400 $ 317,400 3-a. Prepare Wells Technical Institute's income statement for the year. 3-b. Prepare Wells Technical Institute's statement of owner's equity for the year. The T. Wells, Capital account balance was $90,000 on December 31 of the prior year, and there were no owner investments in the current year. 3-c. Prepare Wells Technical Institute's balance sheet as of December 31. ! Required information Req 2A Req 2B Post the balance from the unadjusted trial balance and the adjusting entries into the T-accounts. Unadjusted Balance Cash 34,000 Unadjusted Balance Equipment 80,000 Adjusted Balance 34,000 Adjusted Balance 80,000 Accounts Receivable Accumulated Depreciation-Equipment Unadjusted Balance 0 Unadjusted Balance 15,000 Adjusted Balance 0 Adjusted Balance 15,000 Teaching Supplies Accounts Payable Unadjusted Balance 8,000 Unadjusted Balance 26,000 Adjusted Balance 8,000 Adjusted Balance 26,000 Prepaid Insurance Salaries Payable Unadjusted Balance 12,000 Unadjusted Balance 400 Required information Unadjusted Balance Prepaid Insurance 12,000 Salaries Payable Unadjusted Balance 400 Adjusted Balance 12,000 Adjusted Balance Unadjusted Balance Prepaid Rent 3,000 Unearned Revenue Unadjusted Balance Adjusted Balance 3,000 Adjusted Balance 0 Professional Library T. Wells, Capital Unadjusted Balance 35,000 Unadjusted Balance Adjusted Balance 35,000 Adjusted Balance 0 Accumulated Depreciation-Professional Library Unadjusted Balance T. Wells, Withdrawals 17,200 Unadjusted Balance Adjusted Balance Tuition Revenue Unadjusted Balance 17,200 Adjusted Balance 0 Rent Expense Unadjusted Balance 400 Required information Tuition Revenue Rent Expense Unadjusted Balance Unadjusted Balance Adjusted Balance 0 Adjusted Balance 0 Training Revenue Teaching Supplies Expense Unadjusted Balance Unadjusted Balance Adjusted Balance 0 Adjusted Balance 0 Depreciation Expense-Professional Library Advertising Expense Unadjusted Balance Unadjusted Balance Adjusted Balance 0 Adjusted Balance 0 Depreciation Expense-Equipment Utilities Expense Unadjusted Balance Unadjusted Balance Adjusted Balance 0 Salaries Expense Unadjusted Balance Adjusted Balance 0 Insurance Expense Unadjusted Balance < Prev 4 5 of 5 Now Required information Depreciation Expense-Professional Library Advertising Expense Unadjusted Balance Unadjusted Balance Adjusted Balance 0 Adjusted Balance 0 Depreciation Expense-Equipment Utilities Expense Unadjusted Balance Unadjusted Balance Adjusted Balance 0 Adjusted Balance 0 Salaries Expense Insurance Expense Unadjusted Balance Unadjusted Balance Adjusted Balance 0 Adjusted Balance Req 2A Req 2B > 0