Question

Additional Information Items a. An analysis of WTI's insurance policies shows that $3,203 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,776 are available at year-end. c. Annual depreciation on the equipment is $12,814. d. Annual depreciation on the professional library is $6,407. e. On September 1, WTI agreed to do five courses for a client for $2,300 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 $11,500 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, $10,000 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 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Credit Debit $ 27,245 8 10,478 15,719 2,097 31,436 $ 9,432 73,338 16,768 37, 749 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 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 41,916 11,500 66,646 106,885 39,820 50,300 0 23,067 0 7,336 5,868 $ 288,800 $288,800

Answer 1

Adjusting Entries: CREDIT EVENT a) DEBIT $3,203 $3,203 b) $7,702 ($10478 - $2776] $7,702 c) $12,814 $12,814 d) $6,407 DATE ACCOUNT TITLES Dec. 31 Insurance Expense Prepaid Insurance Dec. 31 Teaching Supplies Expense Teaching Supplies Dec. 31 Depreciation Expense - Equipment Accumulative Depreciation - Equipment Dec. 31 Depreciation Expense - Professional Library Accumulative Depreciation - Professional Library Dec. 31 Unearned Training Fee Training Fees Earned Dec. 31 Accounts Receivable Tuition Fees Earned Dec. 31 Salaries Expense Salaries Payable Dec. 31 Rent Expense Prepaid Rent $6,407 e) $4,600 [$2,300 x 2 courses] $4,600 f) $10,000 (For Oct 15 thru Dec. 31, it is earned --> $5,261 x 2.5 months) $10,000 $400 [2 employees x 2 days x $100] $400 h ) h $2,097 $2,097

Salaries Payable Cash $27,245 $27,245 Unadj. bal. Adj. bal. $0 Professional Library $31,436 $31,436 Unadj. bal. Adj. bal. Unadj. bal. g) Adj. bal. $400 $400 Accounts Receivable $0 Unadj. bal. f) Adj. bal. Accumulated Depreciation - Professional Library Unadj. bal. $9,432 d) $6,407 Adj. bal. $15,839 e) $10,000 $10,000 Unearned Training Fee $4,600 Unadj. bal. Adj. bal. $11,500 $6,900 Teaching Supplies $10,478 b) $2,776 Unadj. bal. Adj. bal. $7,702 Unadj. bal. Adj. bal. Equipment $73,338 $73,338 T. Wells, Capital Unadj. bal. Adj. bal. $66,646 $66,646 Accumulated Depreciation - Equipment Unadj. bal. $16,768 c) $12,814 Adj. bal. $29,582 Prepaid Insurance $15,719 a) $12,516 Unadj. bal Adj. bal. T. Wells, Withdrawals $41,916 $41,916 Unadj. bal. Adj. bal. $3,203 Prepaid Rent $2,097 h) $0 Accounts Payable Unadj. bal. Tution Fees Earned Unadj. bal. $106,885 f) $10,000 Adj. bal. $116,885 Unadj. bal. Adj. bal. $2,097 $37,749 $37,749 Adj. bal.

Training Fees Earned Unadj. bal. e) Adj. bal. $39,820 $4,600 $44,420 Unadj. bal. b) Adj. bal. Teaching Supplies Expense $0 $7,702 $7,702 Depreciation Expense - Prof. Library Unadj. bal. $0 d) $6,407 Adj. bal. $6,407 Unadj. bal. h) Adj. bal. Rent expense $23,067 $2,097 $25,164 Depreciation Expense - Equipment Unadj. bal. $0 c) $12,814 Adj. bal. $12,814 Unadj. bal. Adj. bal. Advertising Expense $7,336 $7,336 Unadj. bal. Adj. bal. Utilities Expense $5,868 $5,868 Unadj. bal. Salaries Expense $50,300 $400 $50,700 Adj. bal. Unadj. bal. a) Adj. bal. Insurance expense $0 $3,203 $3,203

CREDIT $15,839 WELLS TECHNICAL INSTITUTE Adjusted Trial Balance December 31 ACCOUNT TITLES DEBIT Cash $27,245 Accounts Receivable $10,000 Teaching Supplies $2,776 Perpaid Insurance $12,516 Professional Library $31,436 Accumulated Depreciation - Professional Library Equipment $73,338 Accumulated Depreciation - Equipment Accounts Payable Salaries Payable Unearned Training Fee T.Wells, Capital T.Wells, Withdrawals $41,916 Tution Fees Earned Training Fees Earned Depreciation Expense - Prof. Library $6,407 Depreciation Expense - Equipment $12,814 Salaries Expense $50,700 Insurance expense $3,203 Rent expense $25,164 Teaching Supplies Expense $7,702 Advertising Expense $7,336 Utilities Expense $5,868 TOTALS $318,421 $29,582 $37,749 $400 $6,900 $66,646 $116,885 $44,420 $318,421