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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

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. Its unadjusted trial balance as of December 31, 2015, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of itemsathroughhthat require adjusting entries on December 31, 2015, follow.

Additional Information Items

a. An analysis of WTI's insurance policies shows that $3,864 of coverage has expired.
b. An inventory count shows that teaching supplies costing $3,349 are available at year-end 2015.
c. Annual depreciation on the equipment is $15,458.
d. Annual depreciation on the professional library is $7,729.
e.

On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,700, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2016.

f.

On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,900 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.)

g.

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.

h. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31, 2015
Debit Credit
Cash $ 28,000
Accounts receivable 0
Teaching supplies 10,768
Prepaid insurance 16,155
Prepaid rent 2,155
Professional library 32,307
Accumulated depreciationProfessional library $ 9,693
Equipment 75,368
Accumulated depreciationEquipment 17,232
Accounts payable 37,113
Salaries payable 0
Unearned training fees 13,500
Common stock 13,699
Retained earnings 54,794
Dividends 43,078
Tuition fees earned 109,846
Training fees earned 40,923
Depreciation expenseProfessional library 0
Depreciation expenseEquipment 0
Salaries expense 51,694
Insurance expense 0
Rent expense 23,705
Teaching supplies expense 0
Advertising expense 7,539
Utilities expense 6,031
Totals $ 296,800 $ 296,800

2. value: 10.00 points Required information
Required:
1.

Prepare the necessary adjusting journal entries for itemsathroughh. Assume that adjusting entries are made only at year-end.

References eBook & Resources WorksheetLearning Objective: 03-P1 Prepare and explain adjusting entries.Learning Objective: 03-P3 Prepare financial statements from an adjusted trial balance. Difficulty: 3 HardLearning Objective: 03-P2 Explain and prepare an adjusted trial balance.Check my work 3. value: 10.00 points Required information
2.1

Post the balance from the unadjusted trial balance and the adjusting entries in to theT-accounts.

2.2

Prepare an adjusted trial balance.

rev: 09_18_2015_QC_CS-25178, 09_24_2015_QC_CS-26377

References eBook & Resources WorksheetLearning Objective: 03-P1 Prepare and explain adjusting entries.Learning Objective: 03-P3 Prepare financial statements from an adjusted trial balance. Difficulty: 3 HardLearning Objective: 03-P2 Explain and prepare an adjusted trial balance.Check my work 4. value: 10.00 points Required information
3.1

Prepare Wells Technical Institute's income statement for the year 2015.

3.2

Prepare Wells Technical Institute's statement of retained earnings for the year 2015.

3.3

Prepare Wells Technical Institute's balance sheet as of December 31, 2015.

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