Institute Adjusting Entries And Financial Statements

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, 2013, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of itemsathroughhthat require adjusting entries on December 31, 2013, follow.
 
Additional Information Items
 
a.
An analysis of WTI’s insurance policies shows that $3,350 of coverage has expired.
b.
An inventory count shows that teaching supplies costing $3,750 are available at year-end 2013.
c.
Annual depreciation on the equipment is $15,100.
d.
Annual depreciation on the professional library is $9,100.
e.
On November 1, WTI agreed to do a (starting immediately) for a client. The contract calls for a monthly fee of $4,400, 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 2014.
f.
On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,900 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 ; 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 $290 per day for each employee.
h.
The balance in the Prepaid Rent account represents rent for December.
 
WELLS TECHNICAL INSTITUTEUnadjusted Trial BalanceDecember 31, 2013
 
Debit
Credit
Cash
$
53,000
 
 
Accounts receivable
 
0
 
 
Teaching supplies
 
9,900
 
 
Prepaid insurance
 
13,900
 
 
Prepaid rent
 
4,900
 
 
Professional library
 
54,000
 
 
Accumulated depreciationProfessional library
 
 
$
11,900
Equipment
 
99,000
 
 
Accumulated depreciationEquipment
 
 
 
16,900
Accounts payable
 
 
 
46,900
Salaries payable
 
 
 
0
Unearned training fees
 
 
 
22,000
Common stock
 
 
 
29,000
Retained earnings
 
 
 
99,000
Dividends
 
69,000
 
 
Tuition fees earned
 
 
 
146,700
Training fees earned
 
 
 
59,000
Depreciation expenseProfessional library
 
0
 
 
Depreciation expenseEquipment
 
0
 
 
Salaries expense
 
69,000
 
 
Insurance expense
 
0
 
 
Rent expense
 
42,500
 
 
Teaching supplies expense
 
0
 
 
Advertising expense
 
7,900
 
 
Utilities expense
 
8,300
 
 
 
Totals
$
431,400
$
431,400
 
2.
value:10.00 points
 
2.
Prepare the necessary adjusting journal entries for items a through h
Post the entries in T- Accounts
Prepare Adjusted Trial Balance
Prepare Income Statement, Statement of retained earnings, Balance Sheet