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 $2,939 of coverage has expired.
- An inventory count shows that teaching supplies costing $2,547 are available at year-end.
- Annual depreciation on the equipment is $11,756.
- Annual depreciation on the professional library is $5,878.
- 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.
- 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.
- 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
Accounts receivable 0
Teaching supplies 10,362
Prepaid insurance 15,545
Prepaid rent 2,073
Professional library 31,088
Accumulated depreciation—Professional library $9,328
Accumulated depreciation—Equipment 16,582
Accounts payable 25,000
Salaries payable 0
Unearned training fees 14,000
Common stock 16,077
Retained earnings 84,000
Tuition fees earned 105,701
Training fees earned 39,379
Depreciation expense—Professional library 0
Depreciation expense—Equipment 0
Salaries expense 49,743
Insurance expense 0
Rent expense 22,803
Teaching supplies expense 0
Advertising expense 7,254
Utilities expense 5,803
Totals $310,067 $310,067
2-a. Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts.
2-b. make an adjusted trial balance.
a) Adjusting entries to be recorded: 1. Insurance expense A/c Dr $2,939 Prepaid insurance A/c Cr $2,939 2. Teaching supplies... View the full answer