Question

a. An analysis of WTI's insurance policies shows that $2,400 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,800 are available at year-end. c. Annual depreciation on the equipment is $13,200. d. Annual depreciation on the professional library is $7,200. e. 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 Uneamed 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, $7,500 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 Credit Debit $ 34,000 8,000 12,000 3,000 35,000 $ 10,000 80,000 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 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 Common stock Retained earnings Dividends 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 15,000 26,000 0 12,500 10,000 80,000 50,000 123,900 40,000 50,000 33,000 6,000 6,400 < Prev 3 of 4 !!! Next >

Answer 1

За WELLS TECHNICAL INSTITUTE Income Statement For Year Ended December 31 Revenue : Tuition Revenue Training Revenue 142650 45000 $ 187650 Expense : Salaries expense Insurance Expense Rent Expense Teaching Supplies Expense Advertising expense Utilities expense Depreciation expense - Equipment Depreciation expense - Professional Library Total Expense 50400 2400 36000 5200 6000 6400 13200 7200 $ 126800 Net Income $ 60850 3 b WELLS TECHNICAL INSTITUTE Statement of Retained Earning For Year Ended December 31 Retained Earning, December 31, prior year end Add : Net Income $ 80000 60850 140850 -50000 $ 90850 Less : Dividend Retained Earning, December 31, current year end

3 c WELLS TECHNICAL INSTITUTE Balancesheet For Year Ended December 31 Assets Amount ($) Amount ($) Current Asset Cash 34000 Account Receivable 18750 Teaching supplies 2800 Prepaid Insurance 9600 Prepaid Rent 0 Total Current asset 65150 Property, Plant and Equipments Professional Library 35000 Less : Accumulated Depreciation - Professional Library -17200 Equipment 80000 Less : Accumulated Depreciation - Equipment -28200 Property, Plant and Equipments - Net 69600 Total Assets 134750 Liabilities and Stockholders' Equity Current Liabilities Account Payable 26000 Salary payable 400 Unearned Revenue 7500 Total Current Liabilities 33900 Stockholders' Equity Common Stock 10000 Retained earning 90850 100850 Total stockholders' equity 100850 Total liabilities and stockholders' Equity 134750

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