[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 An analysis of WTI's insurance policies shows that $3,071 of coverage has expired. An inventory count shows that teaching supplies costing $2,662 are available at year-end. Annual depreciation on the equipment is $12,285. Annual depreciation on the professional library is $6,142. On September 1, WTI agreed to do five courses for a client for $2,900 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 $14,500 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. 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, $7,850 of the tuition 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 $ 28,151 Accounts receivable 0 Teaching supplies 10,826 Prepaid insurance 16,242 Prepaid rent 2,166 Professional library 32,481 Accumulated depreciationProfessional library $ 9,746 Equipment 103,000 Accumulated depreciationEquipment 17,325 Accounts payable 25,000 Salaries payable 0 Unearned training fees 14,500 Common stock 24,464 Retained earnings 83,000 Dividends 43,310 Tuition fees earned 110,438 Training fees earned 41,143 Depreciation expenseProfessional library 0 Depreciation expenseEquipment 0 Salaries expense 51,972 Insurance expense 0 Rent expense 23,826 Teaching supplies expense 0 Advertising expense 7,579 Utilities expense 6,063 Totals $ 325,616 $ 325,616 Required:

1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end.

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. 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.