Question

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 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. 1. 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. 9. 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 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit 28,000 Credit 10,768 16,155 2,155 32,307 $ 75,368 9,693 17,232 37,113 13,500 Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation Professional library Equipment Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees 1. Wells, Capital T. Wells, withdrawals Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 43,078 109,846 40,923 51,694 23,705 7.539 6,031 $ 296,800 $296,800 < Prev 3 of 5 !!! Next >

Answer 1

Wells Technical Institute (WTI) Adjusting Enteries Date Particulars 31.12.2018 Insurance Expense a/c To Prepaid Insurance (Insurance expensed) Dr. Debit in $Credit in $ 3071 3071 Debit in $ Credit in $ 28000 8350 2662 13084 Dr. 8106 31.12.2018 Teaching supplies expense a/c To Supplies (Supplies expensed) 10768 - 2662 8106 32307 15835 12285 75368 31.12.2018 Depreciation expense-Equipment a/c Dr. To Accumulated depreciation Equipment (To record depreciation) 12285 29517 37113 400 8100 68493 6142 Adjusted Trial Balance For the period ending 31.12.2018 Particulars Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciation - Professional library Equipment Accumulated depreciation Equipment Accounts payable Salaries payable Unearned training fees T.Wells, Capital Retained Earnings T.Wells, Withdrawals Tuition fees earned Training fees earned Depreciation expense- Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 31.12.2018 Depreciation expense-Professional library a/c Dr. To Accumulated depreciation-Professional library (To record depreciation) 6142 43078 Dr. 5400 31.12.2018 Unearned Training Fees a/c To Training fees earned (Revenue recognized) 2700 x 2 118196 46323 5400 6142 Dr. 8350 31.12.2018 Accounts receivable a/c To Tuition fees earned (Revenue accrued) 12285 52094 3071 25860 8106 7539 6031 323977 400 31.12.2018 Salaries expense a/c To Salaries payable (Salary expense accrued) 2 x 2 x 100 = 400 400 323977 31.12.2018 Rent Expense a/c To Prepaid Rent (Rent expensed)

Statement of Income For the period ending 31.12.2018 Tuition fees earned Training fees earned 118196 46323 164519 Less: Depreciation expense- Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Net Income 6142 12285 52094 3071 25860 8106 7539 6031 121128 43391 Statement of Owner's Equity For the period ending 31.12.2018 T. Wells, Capital Add:Net Income 68493 43391 111884 -43078 68806 T. Wells, Withdrawals

400 Balance sheet As at 31.12.2018 Assets Amounts in $ Amounts in $ Liabilites & Equity Amounts in $ Amounts in $ Current Assets Current Liabilities Cash 28000 Accounts payable 37113 Accounts receivable 8350 Salaries payable Teaching supplies 2662 Unearned training fees 8100 45613 Prepaid insurance 13084 52096 Owner's Equity Non Current Assets T. Wells, Capital 68806 Professional library 32307 68806 Accumulated deprecí -15835 16472 Equipment 75368 Accumulated depreci -29517 45851 Total Assets 114419 Total Liabilities & Equity 114419