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. WT1 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 $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 $12,500cash in advance for all five training courses on September 1 , and WTI credited Unearned Revenue. 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,$9,500 of the tuition revenue 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. 2-a. Post the balance from the unadjusted trial balance and the adjusting entries into the T-accounts. 2-b. Prepare an adjusted trial balance. \begin{tabular}{|l|l|l|l|l|} \hline \multicolumn{2}{|c|}{ Unearned Revenue } \\ \hline Unadjusted Balance & & & \\ \hline & & & \\ \hline & & & \\ \hline Adjusted Balance & & \\ \hline & T. Wells, Capital \\ \hline & & \\ \hline Unadjusted Balance & & \\ \hline & & \\ \hline \end{tabular} \begin{tabular}{|l|l|l|l|} \hline \multicolumn{1}{|c|}{ WELLS TECHNICAL INSTITUTE } \\ \hline \multicolumn{1}{|c|}{ Adjusted Trial Balance } \\ \hline \multicolumn{1}{|c|}{ December 31} & Debit & Credit \\ \hline Cash & $27,094 & \\ \hline Accounts receivable & & \\ \hline Teaching supplies & & \\ \hline Prepaid insurance & & \\ \hline Prepaid rent & & \\ \hline Professional library & & \\ \hline Accumulated depreciation-Professional library & & \\ \hline Equipment & & \\ \hline Accumulated depreciation-Equipment & & \\ \hline Accounts payable & & \\ \hline Salaries payable & & \\ \hline Unearned revenue & & \\ \hline T. Wells, Capital & & \\ \hline T. Wells, Withdrawals & & \\ \hline Tuition revenue & & \\ \hline Training revenue & & \\ \hline Depreciation expense-Professional library & & \\ \hline Depreciation expense-Equipment & & \\ \hline \end{tabular} IIDrary 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 $27,094 $0
