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 An analysis of WTI's insurance policies shows that $2,807 of coverage has expired. An inventory count shows that teaching supplies costing $2,433 are available at year-end. Annual depreciation on the equipment is $11,227. Annual depreciation on the professional library is $5,614. 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 Revenue. 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, $6,798 of the tuition revenue has been earned by WTI. 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. The balance in the Prepaid Rent account represents rent for December. WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Credit Cash $ 26,340 Accounts receivable 0 Teaching supplies 10,129 Prepaid insurance 15,197 Prepaid rent 2,027 Professional library 30,391 Accumulated depreciationProfessional library $ 9,119 Equipment 99,000 Accumulated depreciationEquipment 16,210 Accounts payable 26,000 Salaries payable 0 Unearned revenue 14,000 Common stock 16,140 Retained earnings 84,000 Dividends 40,523 Tuition revenue 103,332 Training revenue 38,496 Depreciation expenseProfessional library 0 Depreciation expenseEquipment 0 Salaries expense 48,628 Insurance expense 0 Rent expense 22,297 Teaching supplies expense 0 Advertising expense 7,092 Utilities expense 5,673 Totals $ 307,297 $ 307,297 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 $84,000 on December 31 of the prior year. 3-c. Prepare Wells Technical Institute's balance sheet as of December 31.