[The following information applies to the questions displayed below.] Wells Technical Institute (WTI) 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 An analysis of WTI's insurance policies shows that $3,203 of coverage has expired. An inventory count shows that teaching supplies costing $2,776 are available at year-end. Annual depreciation on the equipment is $12,814. Annual depreciation on the professional library is $6,407. 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. 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, $9,500 of the tuition revenue has been earned by WTI. 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. The balance in the Prepaid Rent account represents rent for December. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Credit Cash $ 27,094 Accounts receivable 0 Teaching supplies 10,420 Prepaid insurance 15,632 Prepaid rent 2,085 Professional library 31,262 Accumulated depreciationProfessional library $ 9,380 Equipment 103,000 Accumulated depreciationEquipment 16,675 Accounts payable 26,000 Salaries payable 0 Unearned revenue 12,500 Common stock 23,818 Retained earnings 83,000 Dividends 41,684 Tuition revenue 106,293 Training revenue 39,599 Depreciation expenseProfessional library 0 Depreciation expenseEquipment 0 Salaries expense 50,022 Insurance expense 0 Rent expense 22,935 Teaching supplies expense 0 Advertising expense 7,295 Utilities expense 5,836 Totals $ 317,265 $ 317,265 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 $83,000 on December 31 of the prior year. 3-c. Prepare Wells Technical Institute's balance sheet as of December 31. Prepare Wells Technical Institute's income statement for the year. 50022 WELLS TECHNICAL INSTITUTE Income Statement For Year Ended December 31 Revenues Tuition revenue $115,793 Training revenue Total revenues Expenses Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Depreciation expenseProfessional library Depreciation expenseEquipment Total expenses Net income Prepare Wells Technical Institute's statement of retained earnings for the year. The Retained Earnings account balance was $83,000 on December 31 of the prior year. WELLS TECHNICAL INSTITUTE Statement of Retained Earnings For Year Ended December 31 Retained earnings, December 31 prior year end $83,000 Add: Net income 83,000 Less: Dividends 41,684 Retained earnings, December 31 current year end $ repare Wells Technical Institute's balance sheet as of December 31. (Include all balance sheet accounts, even those with zero balances.) WELLS TECHNICAL INSTITUTE Balance Sheet December 31 Assets Cash $27,094 Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciationProfessional library 0 Equipment Accumulated depreciationEquipment 0 Total assets $27,094 Liabilities Accounts payable $26,000 Salaries payable 400 Unearned revenue Total liabilities 26,400 Equity Common stock 0 $26,400