Question

Required information [The following information applies to the questions displayed below.] Wells Technical Institute (WTI), a...

Required information

[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 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 $2,807 of coverage has expired.
  2. An inventory count shows that teaching supplies costing $2,433 are available at year-end.
  3. Annual depreciation on the equipment is $11,227.
  4. Annual depreciation on the professional library is $5,614.
  5. On September 1, WTI agreed to do five 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 courses on September 1, and WTI credited Unearned Training Fees.
  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, $7,548 of the tuition 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 $ 28,151
Accounts receivable 0
Teaching supplies 10,826
Prepaid insurance 16,242
Prepaid rent 2,166
Professional library 32,481
Accumulated depreciation—Professional library $ 9,746
Equipment 99,000
Accumulated depreciation—Equipment 17,325
Accounts payable 26,000
Salaries payable 0
Unearned training fees 12,500
Common stock 22,464
Retained earnings 82,000
Dividends 43,310
Tuition fees earned 110,438
Training fees earned 41,143
Depreciation expense—Professional library 0
Depreciation expense—Equipment 0
Salaries expense 51,972
Insurance expense 0
Rent expense 23,826
Teaching supplies expense 0
Advertising expense 7,579
Utilities expense 6,063
Totals $ 321,616 $ 321,616

2-a. Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts.
2-b. Prepare an adjusted trial balance.

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Answer #1

Part 2-a

Cash

Equipment

Unadj. Bal.

28151

Unadj. Bal.

99000

Adj. Bal.

28151

Adj. Bal.

99000

Accounts Receivable

Accumulated Depreciation—Equipment

Unadj. Bal.

0

Unadj. Bal.

17325

f

7548

c

11227

Adj. Bal.

7548

Adj. Bal.

28552

Teaching Supplies

Accounts Payable

Unadj. Bal.

10826

0

Unadj. Bal.

26000

0

b

8393

0

Adj. Bal.

2433

Adj. Bal.

26000

Prepaid Insurance

Salaries Payable

Unadj. Bal.

16242

Unadj. Bal.

0

a

2807

g

400

Adj. Bal.

13435

Adj. Bal.

400

Prepaid Rent

Unearned Training Fees

Unadj. Bal.

2166

Unadj. Bal.

12500

h

2166

e

5000

Adj. Bal.

0

Adj. Bal.

7500

Professional Library

Common Stock

Unadj. Bal.

32481

Unadj. Bal.

22464

Adj. Bal.

32481

Adj. Bal.

22464

Accumulated Depreciation—Professional Library

Dividends

Unadj. Bal.

9746

Unadj. Bal.

43310

d

5614

Adj. Bal.

15360

Adj. Bal.

43310

Tuition Fees Earned

Insurance Expense

Unadj. Bal.

110438

Unadj. Bal.

0

f

7548

a

2807

Adj. Bal.

117986

Adj. Bal.

2807

Training Fees Earned

Rent Expense

Unadj. Bal.

0

41143

Unadj. Bal.

23826

0

e

5000

h

2166

Adj. Bal.

46143

Adj. Bal.

25992

Depreciation Expense—Professional Library

Teaching Supplies Expense

Unadj. Bal.

0

Unadj. Bal.

0

d

5614

b

8393

Adj. Bal.

5614

Adj. Bal.

8393

Depreciation Expense—Equipment

Advertising Expense

Unadj. Bal.

0

Unadj. Bal.

7579

c

11227

Adj. Bal.

11227

Adj. Bal.

7579

Salaries Expense

Utilities Expense

Unadj. Bal.

51972

Unadj. Bal.

6063

g

400

Adj. Bal.

52372

Adj. Bal.

6063

Retained earnings

Unadj. Bal.

82000

Adj. Bal.

82000

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