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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

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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 that require adjusting entries on December 31 Additional Information Items a. An analysis of WTI's Insurance policies shows that $3,203 of coverage has expired. b. An inventory count shows that teaching supplies costing $2.776 are available at year-end. c. Annual depreciation on the equipment is $12,814 d. Annual depreciation on the professional library is $6,407 e. 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. 1. 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, $9,500 of the tuition revenue has been earned by WTI. 9. Wit's two employees are paid weekly. As of the end of the year, wo days' solaries have accrued at the rate of $100 per day for each employee h. The balance in the Prepaid Rent account represents rent for December Ces WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Credit Debit $ 26,340 0 10,129 15,197 2,027 30,391 $ 9, 119 96,000 Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation-Professional Library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned revenue T. Wells, Capital T. Wells, Withdrawals Tuition revenue Training revenue Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 16, 210 21,000 0 12,500 103,640 40,523 103,332 38,496 48,628 22,297 @ 7,092 5,673 $ 304,297 $ 304, 297 Income Statement For Year Ended December 31 Revenues Tuition revenue Training revenue Cash 0 0 > 0 Expenses Salaries expense Rent expense Advertising expense Teaching supplies expense Depreciation expense - Professional library Depreciation expense-Equipment Insurance expense 49,028 24,324 7,092 7,353 6,407 12,814 3,203 5,673 Utilities expense 115,894 Total expenses Net income Reg 3A Reg 3B Reg 3C Prepare Wells Technical Institute's statement of owner's equity for the year. The T. Wells, Capital account balance was $103,640 on December 31 of the prior year, and there were no owner investments in the current year. WELLS TECHNICAL INSTITUTE Statement of Owner's Equity For Year Ended December 31 T. Wells, Capital, December 31 prior year $ 103,332 X Add: Investments by owner Add: Net Income 103,332 206,664 Less: Withdrawals by owner 40,523 T. Wells, Capital, December 31 current year $ 166,141 WELLS TECHNICAL INSTITUTE Balance Sheet December 31 0 0 $ 0 0

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