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

1. An analysis of WTI's insurance policies shows that $2,939 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,547 are available at year-end.
3. Annual depreciation on the equipment is $11,756.
4. Annual depreciation on the professional library is $5,878.
5. On September 1, WTI agreed to do five courses for a client for $2,800 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 $14,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees.
6. 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, $7,450 of the tuition has been earned by WTI.
7. 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.
8. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31
	Debit			Credit
Cash	$	27,698
Accounts receivable		0
Teaching supplies		10,652
Prepaid insurance		15,981
Prepaid rent		2,132
Professional library		31,958
Accumulated depreciationProfessional library				$	9,589
Equipment		97,000
Accumulated depreciationEquipment					17,046
Accounts payable					26,000
Salaries payable					0
Unearned training fees					14,000
Common stock					23,267
Retained earnings					77,000
Dividends		42,613
Tuition fees earned					108,661
Training fees earned					40,482
Depreciation expenseProfessional library		0
Depreciation expenseEquipment		0
Salaries expense		51,136
Insurance expense		0
Rent expense		23,452
Teaching supplies expense		0
Advertising expense		7,457
Utilities expense		5,966
Totals	$	316,045		$	316,045

Required: 1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end.

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.

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.