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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 $2,674 of coverage has expired.

An inventory count shows that teaching supplies costing $2,318 are available at year-end.

Annual depreciation on the equipment is $10,698.

Annual depreciation on the professional library is $5,349.

On September 1, WTI agreed to do five courses for a client for $2,300 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 $11,500 cash in advance for all five 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, $7,403 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	$ 27,547
Accounts receivable	0
Teaching supplies	10,594
Prepaid insurance	15,894
Prepaid rent	2,120
Professional library	31,784
Accumulated depreciationProfessional library		$ 9,537
Equipment	99,000
Accumulated depreciationEquipment		16,954
Accounts payable		27,000
Salaries payable		0
Unearned revenue		11,500
Common stock		23,527
Retained earnings		80,000
Dividends	42,381
Tuition revenue		108,069
Training revenue		40,261
Depreciation expenseProfessional library	0
Depreciation expenseEquipment	0
Salaries expense	50,858
Insurance expense	0
Rent expense	23,320
Teaching supplies expense	0
Advertising expense	7,417
Utilities expense	5,933
Totals	$ 316,848	$ 316,848

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 $80,000 on December 31 of the prior year.

3-c. Prepare Wells Technical Institute's balance sheet as of December 31.