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 Items a. An analysis of WTI's insurance policies shows that $2,674 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,318 are available at year-end. c. Annual depreciation on the equipment is $10,698. d. Annual depreciation on the professional library is $5,349. e. On September 1, WTI agreed to do five courses for a client for $2,800 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 $14,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. 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, $6,153 of the tuition 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. Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Accumulated depreciation Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees Common stock Retained earnings Dividends Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment salaries expense Insurance expense Rent expense Advertising expense Utilities expense Totals Teaching supplies expense Debit Credit $ 26,491 10,187 15,284 2,039 30,565 $ 9,171 184,000 16,303 25,000 14,000 28,380 78,000 40,755 103,924 38,717 48,987 22,429 7,132 5,706 $ 313,495 $313,495 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.