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

1. An analysis of WTI's insurance policies shows that $3,732 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,235 are available at year-end.
3. Annual depreciation on the equipment is $14,929.
4. Annual depreciation on the professional library is $7,464.
5. On September 1, WTI agreed to do five training courses for a client for $2,400 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 $12,000 cash in advance for all five training courses on September 1, and WTI credited Unearned Revenue.
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, $12,350 of the tuition revenue 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	$ 26,189
Accounts receivable	0
Teaching supplies	10,071
Prepaid insurance	15,110
Prepaid rent	2,015
Professional library	30,217
Accumulated depreciationProfessional library		$ 9,066
Equipment	97,000
Accumulated depreciationEquipment		16,117
Accounts payable		26,000
Salaries payable		0
Unearned revenue		12,000
Common stock		21,902
Retained earnings		78,000
Dividends	40,291
Tuition revenue		102,740
Training revenue		38,275
Depreciation expenseProfessional library	0
Depreciation expenseEquipment	0
Salaries expense	48,350
Insurance expense	0
Rent expense	22,165
Teaching supplies expense	0
Advertising expense	7,051
Utilities expense	5,641
Totals	$ 304,100	$ 304,100

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 $78,000 on December 31 of the prior year.

3-c. Prepare Wells Technical Institute's balance sheet as of December 31.