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, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2017, follow. Additional Information Items a. An analysis of WTI's insurance policies shows that $3,468 of coverage has expired. b. An inventory count shows that teaching supplies costing $3,006 are available at year-end 2017. c. Annual depreciation on the equipment is $13,871. d. Annual depreciation on the professional library is $6,936. e. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for monthly fee of $2,500, 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 2018. f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,319 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. a. An analysis of WTI's insurance policies shows that $3,468 of coverage has expired. b. An inventory count shows that teaching supplies costing $3,006 are available at year-end 2017. C. Annual depreciation on the equipment is $13,871. d. Annual depreciation on the professional library is $6,936. 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 $2,500, 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 2018. f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,319 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, 2017 Credit Debit $ 28,000 0 10,768 16, 155 2,155 32,307 $ 9,693 75,368 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 T. Wells, Capital T. Wells, Withdrawals 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 17, 232 38,113 0 12,500 68,493 43,078 109,846 40,923 0 0 51,694 0 23, 705 0 7,539 6,031 $ 296,800 $296,800 Problem 3-3A Part 1 Required: 1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end. View transaction list View journal entry worksheet No Transaction General Journal Debit Credit 1 a. 3,468 Insurance expense Prepaid insurance 3,468 2 b. 7,762 Teaching supplies expense Teaching supplies 7,762 3 C. 13,871 Depreciation expenseEquipment Accumulated depreciationEquipment 13,871 4 d. 6,936 Depreciation expenseProfessional library Accumulated depreciationProfessional library 6,936 5 e. 5,000 Unearned training fees Training fees earned 5,000 6 f. 10,798 Accounts receivable Tuition fees earned 10,798 7 g. Salaries expense 400 400 8 h. 2,155 Rent expense Prepaid rent 2,155 Problem 3-3A Part 2 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. Complete this question by entering your answers in the tabs below. Reg 2A Req 2B Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts. Cash Equipment 75,368 Unadj. Bal. 28,000 Unadj. Bal. Adj. Bal. 28,000 Adj. Bal. 75,368 Accounts Receivable Accumulated Depreciation Equipment Unadj. Bal. 17,232 Unadj. Bal. 0 10,798 13,871 Adj. Bal. 10,798 Adj. Bal. 31,103 Accounts Payable Teaching Supplies 10,768 Unadj. Bal. Unadj. Bal. 38,113 b 3,006 Adj. Bal. 7,762 Adj. Bal. 38,113 Salaries Payable Prepaid Insurance 16,155 Unadj. Bal. Unadj. Bal. 0 3,468 g 400 Adj. Bal. 12,687 Adj. Bal. 400 Unearned Training Fees Prepaid Rent 2,085 Unadj. Bal. Unadj. Bal. 12,500 h 2,085 5,000 Adj. Bal. 0 Adj. Bal. 7,500 T. Wells, Capital Professional Library 32,307 Unadj. Bal. Unadj. Bal. Adj. Bal. 32,307 Adj. Bal. 0 T. Wells, Withdrawals Accumulated Depreciation-Professional Library Unadj. Bal. 9,693 d 6,936 Unadj. Bal. Adj. Bal. 16,629 Adj. Bal. 0 Tuition Fees Earned Rent Expense 23,705 Unadj. Bal. Unadj. Bal. h 2,155 Adj. Bal. 0 Adj. Bal. 25,860 Tuition Fees Earned Rent Expense 23,705 Unadj. Bal. Unadj. Bal. h 2,155 Adj. Bal. 0 Adj. Bal. 25,860 Training Fees Earned Unadj. Bal. Unadj. Bal. Teaching Supplies Expense 0 7,762 b Adj. Bal. 0 Adj. Bal. 7,762 Depreciation Expense-Professional Library Unadj. Bal. 0 d 6,936 Advertising Expense 7,539 Unadj. Bal. Adj. Bal. 6,936 Adj. Bal. 7,539 Depreciation Expense-Equipment Unadj. Bal. 0 13,871 Utilities Expense 6,031 Unadj. Bal. Adj. Bal. 13,871 Adj. Bal. 6,031 Insurance Expense Salaries Expense 51,694 Unadj. Bal. Unadj. Bal. 0 g 400 a 3,468 Adj. Bal. 52,094 Adj. Bal. 3,468 Prepare an adjusted trial balance. Credit WELLS TECHNICAL INSTITUTE Adjusted Trial Balance December 31, 2017 Debit Cash $ 28,000 Accounts receivable 10,798 Teaching supplies 3,006 Prepaid insurance Prepaid rent Professional library 32,307 Accumulated depreciationProfessional library Equipment 75,368 Accumulated depreciation Equipment Accounts payable Salaries payable Unearned training fees T. Wells, Capital T. Wells, Withdrawals Tuition fees earned Training fees earned Depreciation expenseProfessional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals $ 149,479 38,113 400 $ 38,513