Question

Required information Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P6 (The following information applies to the questions displayed below) 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 prepa. 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 $3,071 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,662 are available at year-end. c. Annual depreciation on the equipment is $12,285. d. Annual depreciation on the professional library is $6,142. e. On September 1, WTI agreed to do five courses for a client for $2,700 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 $13,500 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees. 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, $8,350 of the tuition 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

have another question similar this is part 2

Answer 1

Adjusted entries as follows:

Trn.	Account Titles	Debit	Credit
a	Insurance expense	$3,071
	Prepaid Insurance		$3,071
b	Teaching Supplies expense ($10768-$2662)	$8,106
	Teaching Supplies		$8,106
c	Deprectaion expense-equipment	$12,285
	Accumulated depreciation-equipment		$12,285
d	Deprectaion expense-professional library	$6,142
	Accumulated depreciation-professional library		$6,142
e	Unearned traning fees ($2700 × 2 course)	$5,400
	Training fees earned		$5,400
f	Accounts receivable	$8,350
	Tution fees earned		$8,350
g	Salaries expense (2 days × 2 emply. × $100)	$400
	Salaries payable		$400
h	Rent expense	$2,155
	Prepaid rent		$2,155

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Prepare T-accounts as follows:

Insurance Expense Unadj. Bal. Accumulated Depreciation -equipment Unadj. Bal. $17,232 $12,285 $3,071 Ad. Bal. $3,071 Ad. Bal. S29,517 Unadj. Bal. Prepaid Insurance $16,155 a $3.071 Accumulated Depreciation professional library Unadj. Bal. $9,693 $6,142 Adj. Bal | S13,084 Adj. Bal | $15,835 Teaching supplies expense Unadj. Bal. - $8,106 Training fees eamed Unadj. Bal. $40.923 $5,400 Ad. Bal. $8,106 Adj. Bal S46,323 Unadj. Bal. Teaching supplies $10,768 6 Uneamed Training fees $5,400 Unadj. Bal. $8,106 $13,500 Ad. Bal. $2,662 Adj. Bal S8.100

Depreciation expense-equipment Unadj. Bal. $12,285 Tution fees earned Unadj. Bal. $ 109,846 $8,350 Ad. Bal | $12.285 Adj. Bal. $118,196 Depreciation expense-Professional library Unadj. Bal. $6.142 Salaries payable Unadj. Bal. - Ad. Bal $6,142 Adj. Bal. $400 Accounts Receivable Unadj. Bal. Prepaid Rent $2,155 h $8,350 Unadj. Bal $2.155 Ad. Bal $8,350 Ad. Bal. SO Unadj. Bal. Salaries expense $51,694 $400 Unadj. Bal Cash $28.000 Ad. Bal $52,094 Ad. Bal. $28,000

Rent expense $23,705 $2,155 Equipment $75,368 Unadj. Bal. Unadj. Bal Ad. Bal. $75,368 Ad. Bal $25,860 Utilities expense $6,031 Accounts payable Unadj. Bal. Unadj. Bal. $8,350 Ad. Bal $6,031 |Adj. Bal. $8,350 I Well, capital Unadj. Bal I Well, withdrawal $43,078 $68,493 Unadj. Bal Adj. Bal | $68,493 Ad. Bal. $43,078

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Prepare Adjusted Trial Balance as follows:

WELLS TECHNICAL INSTITUTE
Adjusted Trial Balance
December 31
	Debit	Credit
Cash	$28,000
Accounts receivable	$8,350
Teaching supplies	$2,662
Prepaid Insurance	$13,084
Prepaid Rent	$0
Professional library	$32,307
Accumulated depreciation-prof. library		$15,835
Equipment	$75,368
Accumulated depreciation-equipment		$29,517
Accounts payable		$37,113
Salaries payable		$400
Unearned training fees		$8,100
T.well capital		$68,493
T.well, withdrawals	$43,078
Tution fees earned		$118,196
Training fees earned		$46,323
Depreciation expense-Prof. library	$6,142
Depreciation expense-equipment	$12,285
Salaries expense	$52,094
Insurance expense	$3,071
Rent expense	$25,860
Teaching supplies expense	$8,106
Advertising expense	$7,539
Utilities expense	$6,031
Totals	$323,977	$323,977

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