Question

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 a. An analysis of WTI's insurance policies shows that $2,807 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,433 are available at year-end. c. Annual depreciation on the equipment is $11,227. d. Annual depreciation on the professional library is $5,614. 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 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, $7,548 of the tuition has been earned by WTI. g. WTl'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

WTI Wells Technical Institute Journal entries No. Account Insurance expense Prepaid Insurance Credit Calculation Debit $ 2,807 a $ 2,807 b $ 7,696 10129-2433 Teaching Supplies expense Teaching Supplies $ 7,696 с $ 11,227 Depreciation expense- Equipment Accumulated Depreciation-Equipment $ 11,227 d $ 5,614 Depreciation expense- Prof Library Accumulated Depreciation Professional Library $ 5,614 e $5,000 2500*2 Unearned Training Fees Training fees eanred $ 5,000 f $ 7,548 Accounts Receivable Tuition fees eanred $ 7,548 g $ 400 =100*2*2 Salaries expense Salaries Payable $ 400 h $ 2,027 Rent expense Prepaid Rent $ 2,027

Wells Technical Institute T Accounts Date Debit Date Cash Unadj Bal $ 26,340 Credit Credit Date Debit Date Equipment Unadj Bal $ 98,000 Adj Bal $ 26,340 Accounts Receivable Unadj Bal $ 31-Dec $ 7,548 Adj Bal $ 98,000 Accum. Depr. - Equipment Unadj Bal $16,210 31-Dec $ 11,227 Adj Bal $ 7,548 Teaching Supplies $ 10,129 31-Dec $ Adj Bal $ 27,437 Accounts Payable Unadj Bal $ 23,000 Unadj Bal 7,696 Adj Bal $ 2,433 Prepaid Insurance $ 15,197 31-Dec $ Adj Bal $ 23,000 Salaries Payable Unadj Bal $ 31-Dec $ 400 Unadj Bal 2,807 Adj Bal $ 12,390 Prepaid Rent $ 2,027 31-Dec $ Adj Bal $ 400 Unearned Training Fees Unadj Bal $ 12,500 31-Dec $ 5,000 Unadj Bal 2,027 Adj Bal $ Professional Library $ 30,391 Adj Bal $ 7,500 Common Stock Unadj Bal $ 19,640 Unadj Bal $ 19,640 Adj Bal $ 30,391 Adj Bal Accum. Depr. - Professional Library Dividends Unadj Bal $ 9,119 Unadj Bal $ 40,523 31-Dec $ 5,614 Adj Bal $ 14,733 Adj Bal Tuition fees earned Unadj Bal $ 103,332 31-Dec $ $ 40,523 Retained Earnings Unadj Bal $ 84,000 7,548 $ 84,000 Adj Bal $ 110,880 Adj Bal Training fees earned Rent expense Unadj Bal $ 38,496 Unadj Bal $ 22,297 31-Dec $ 5,000 31-Dec $ 2,027 Adj Bal $ 43,496 Adj Bal $ 24,324 Depreciation expense-Professional Library Teaching Supplies expense Unadj Bal $ Unadj Bal $ 31-Dec $ 5,614 31-Dec $ 7,696 Adj Bal $ 5,614 Depreciation expense-Equipment Unadj Bal $ 31-Dec $ 11,227 Adj Bal $ 7,696 Advertising expense Unadj Bal $ 7,092 Adj Bal $ 11,227 Salaries expense Unadj Bal $ 48,628 31-Dec $ 400 Adj Bal $ 7,092 Utilities expense Unadj Bal $ 5,673 Adj Bal $ 5,673 Adj Bal $ 49,028 Insurance expense Unadj Bal $ 31-Dec $ 2,807 Adj Bal $ 2,807

Adjusted TB Debit Credit 26,340 7,548 2,433 12,390 Wells Technical Institute Account Names 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 eanred Training fees eanred Depreciation expense- Prof Library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching Supplies expense Advertising expense Utilities expense Totals 30,391 14,733 98,000 27,437 23,000 400 7,500 19,640 84,000 40,523 110,880 43,496 5,614 11,227 49,028 2,807 24,324 7,696 7,092 5,673 331,086 331,086