Question

Required information Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3 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. Its unadjusted trial balance as of December 31, 2018, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2018, follow. Additional Information Items a. An analysis of WTI's Insurance policies shows that $3.864 of coverage has expired. b. An Inventory count shows that teaching supplies costing $3,349 are available at year-end 2018 c. Annual depreciation on the equipment is $15,458. d. Annual depreciation on the professional library is $7,729. e. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,300, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2019. f. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $5,300 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.) 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

Answer 1

1 & 3-a:

Cash
Unadj. bal.	27,094
Adj. bal.	27,094
Accounts Receivable
Unadj. bal.	0
f.	13250
Adj. bal.	13,250
Teaching Supplies
Unadj. bal.	10,420	b.	7,071
Adj. bal.	3,349
Prepaid Insurance
Unadj. bal.	15,632	a.	3,864
Adj. bal.	11,768
Prepaid Rent
Unadj. bal.	2,085	h.	2,085
Adj. bal.	0
Professional Library
Unadj. bal	31,262
Adj. bal.	31,262
Accumulated Depreciation: Professional Library
	Unadj. bal.		9,380
	d.		7,729
	Adj. bal.		17,109
Equipment
Unadj. bal.	72,935
Adj. bal.	72,935
Accumulated Depreciation: Equipment
		Unadj. bal.	16,675
		c.	15,458
		Adj. bal.	32,133
Accounts Payable
		Unadj. bal.	37,476
		Adj. bal.	37,476
Salaries Payable
		Unadj. bal.	0
		g.	400
		Adj. bal.	400
Unearned Training Fees
e.	4,600	Unadj. bal.	11,500
		Adj. bal.	6,900
Common Stock
		Unadj. bal.	11,000
		Adj. bal.	11,000
Retained Earnings
		Unadj. bal.	55,277
Dividends
Unadj. bal.	41,684
Tuition Fees Earned
		Unadj. bal.	106,293
		f.	13,250
		Adj. bal.	119,543
Training Fees Earned
		Unadj. bal.	39,599
		e.	4,600
		Adj. bal.	44,199
Rent Expense
Unadj. bal.	22,935
h.	2,085
Adj. bal.	25,020
Salaries Expense
Unadj. bal.	50,022
g.	400
Adj. bal.	50,422
Depreciation Expense: Professional Library
Unadj. bal.	0
d.	7,729
Adj. bal.	7,729
Depreciation Expense: Equipment
Unadj. bal.	0
c.	15,458
Adj. bal.	15,458
Insurance Expense
Unadj. bal.	0
a.	3,864
Adj. bal.	3,864
Teaching Supplies Expense
Unadj. bal.	0
b.	7,071
Adj. bal.	7,071
Advertising Expense
Unadj. bal.	7,295
Utilities Expense
Unadj. bal.	5,836

1 & 3b:

Wells Technical Institute Adjusted Trial Balance December 31, 2018
	Debit	Credit
Cash	27,094
Accounts Receivable	13,250
Teaching Supplies	3,349
Prepaid Insurance	11,768
Prepaid Rent	0
Professional Library	31,262
Accumulated Depreciation: Professional Library		17,109
Equipment	72,935
Accumulated Depreciation: Equipment		32,133
Accounts Payable		37,476
Salaries Payable		400
Unearned Training Fees		6,900
Common Stock		11,000
Retained Earnings		55,277
Dividends	41,684
Tuition Fees Earned		119,543
Training Fees Earned		44,199
Depreciation Expense: Professional Library	7,729
Depreciation Expense: Equipment	15,458
Salaries Expense	50,422
Rent Expense	25,020
Insurance Expense	3,864
Teaching Supplies Expense	7,071
Advertising Expense	7,295
Utilities Expense	5,836
Totals	324,037	324,037