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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

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

  1. An analysis of WTI's insurance policies shows that $2,400 of coverage has expired.
  2. An inventory count shows that teaching supplies costing $2,800 are available at year-end.
  3. Annual depreciation on the equipment is $13,200.
  4. Annual depreciation on the professional library is $7,200.
  5. On September 1, WTI agreed to do five 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 courses on September 1, and WTI credited Unearned Training Fees.
  6. 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 has been earned by WTI.
  7. 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.
  8. The balance in the Prepaid Rent account represents rent for December.
WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31
Debit Credit
Cash $ 34,000
Accounts receivable 0
Teaching supplies 8,000
Prepaid insurance 12,000
Prepaid rent 3,000
Professional library 35,000
Accumulated depreciationProfessional library $ 10,000
Equipment 80,000
Accumulated depreciationEquipment 15,000
Accounts payable 26,000
Salaries payable 0
Unearned training fees 12,500
T. Wells, Capital 90,000
T. Wells, Withdrawals 50,000
Tuition fees earned 123,900
Training fees earned 40,000
Depreciation expenseProfessional library 0
Depreciation expenseEquipment 0
Salaries expense 50,000
Insurance expense 0
Rent expense 33,000
Teaching supplies expense 0
Advertising expense 6,000
Utilities expense 6,400
Totals $ 317,400 $ 317,400

2-a. Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts. 2-b. Prepare an adjusted trial balance.

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