Answered step by step
Verified Expert Solution
Question
1 Approved Answer
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. 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 $2,400 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,800 are available at year-end. c. Annual depreciation on the equipment is $13,200. d. Annual depreciation on the professional library is $7,200. e. On September 1, WTI agreed to do five 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 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, $7.500 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 $ 34,000 0 8,000 12,000 3,000 35,000 $ 10,000 80,000 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 15,000 26,000 0 12,500 10,000 80,000 50,000 123,900 40,000 50,000 33,000 6,000 6,400 $317,400 $317,400 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 Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts. Cash Equipment 80,000 Unadj. Bal. 34,000 Unadj. Bal. Adj. Bal. 34,000 Adj. Bal. 80,000 Accounts Receivable Accumulated Depreciation Equipment 15,000 Unadj. Bal. Unadj. Bal. 13,200 7,500 Adj. Bal. 7,500 1,800 Adj. Bal. Accounts Payable Teaching Supplies 8,000 Unadj. Bal. 26,000 Unadj. Bal. Adj. Bal. 8,000 Adj. Bal. 26,000 Unadj . Bal. b Adj. Bal. Unadj. Bal. T Adj. Bal adj. Bal. 34,000 WWW j. Bal. 34,000 Accounts b nadj. Bal. C 7,500 d BA
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started