Wells Technical Institute (WTI) 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 $3,600 of coverage has expired. An inventory count shows that teaching supplies costing $3,120 are available at year-end. Annual depreciation on the equipment is $14,400. Annual depreciation on the professional library is $7,200. 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. 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, $11,450 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 $ 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 98,000 Accumulated depreciationEquipment 17,046 Accounts payable 23,000 Salaries payable 0 Unearned revenue 12,500 Common stock 21,767 Retained earnings 84,000 Dividends 42,613 Tuition revenue 108,661 Training revenue 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 $ 317,045 $ 317,045 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. PrevQuestion 3 of 4 Total3 of 4Visit question mapNext