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 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. c. Annual depreciation on the equipment is $15,458. d. Annual depreciation on the professional library is $7,729. e. 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 advance for all five courses on September 1, and WTI credited Unearned Training Fees. f. 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, $13,250 of the tuition has been earned by WTI. 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 Credit $ Debit 26,189 @ 10,071 15,112 2,015 30,217 $ 9,066 184, eee 16, 117 24, eee Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation-Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees Common stock Retained earnings Dividends Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 11,5e2 32,402 77,eee 40,291 182,740 38,275 @ 48,350 22,165 e 7,851 5,641 $ 311,182 $311,1ee Reg 3A Reg 3B Req 3C Prepare Wells Technical Institute's income statement for the year. WELLS TECHNICAL INSTITUTE Income Statement For Year Ended December 31 Revenues $ Tuition fees earned Training fees earned 114,590 42,875 $ 157,465 Total revenues Expenses Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense 7,729 15,458 48,750 3,864 24,180 6,836 Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense 7,051 5,641 Total expenses Net income 119,509 37,956 $ 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 $77,000 on December 31 of the prior year. 3-c. Prepare Wells Technical Institute's balance sheet as of December 31. Complete this question by entering your answers in the tabs below. Reg 3A Req 3B Reg 3C Prepare Wells Technical Institute's statement of retained earnings for the year. The Retained Earnings account balance was $77,000 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 Add: Net income $ 0 37,956 37,956 40,921 -2,965 Less: Owner's investment Retained earnings, December 31 current year end $ Reg 3A Reg 3B Reg 30 Prepare 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 $ 26,189 Accounts receivable Teaching supplies Prepaid insurance 3,349 0 Professional library Depreciation expense-Professional library Equipment Accumulated depreciation Equipment $ 29,538 Liabilities Accounts payable Salaries payable Unearned training fees 400 400 Equity Retained earnings 0 $ 400