Question
[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
[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 $2,400 of coverage has expired.
- An inventory count shows that teaching supplies costing $2,800 are available at year-end.
- Annual depreciation on the equipment is $13,200.
- Annual depreciation on the professional library is $7,200.
- 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, $7,500 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 | $ | 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 revenue | 12,500 | ||||||||
| Common stock | 10,000 | ||||||||
| Retained earnings | 80,000 | ||||||||
| Dividends | 50,000 | ||||||||
| Tuition revenue | 123,900 | ||||||||
| Training revenue | 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 into the T-accounts. 2-b. Prepare an adjusted trial balance. 
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Cost Accounting Foundations And Evolutions
Authors: Amie Dragoo, Michael Kinney, Cecily Raiborn
10th Edition
1618533533, 9781618533531
