Problem 3-3A (Algo) Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P5

[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 itemsathroughhthat require adjusting entries on December 31.

Additional Information Items

1. An analysis of WTI's insurance policies shows that $3,864 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,349 are available at year-end.
3. Annual depreciation on the equipment is $15,458.
4. Annual depreciation on the professional library is $7,729.
5. 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 Revenue.
6. 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, $13,250 of the tuition revenue has been earned by WTI.
7. 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.
8. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE

Unadjusted Trial Balance

December 31DebitCreditCash$26,793Accounts receivable0Teaching supplies10,304Prepaid insurance15,458Prepaid rent2,062Professional library30,913Accumulated depreciationProfessional library$9,275Equipment103,000Accumulated depreciationEquipment16,489Accounts payable25,000Salaries payable0Unearned revenue11,500Common stock32,351Retained earnings76,000Dividends41,220Tuition revenue105,108Training revenue39,158Depreciation expenseProfessional library0Depreciation expenseEquipment0Salaries expense49,464Insurance expense0Rent expense22,682Teaching supplies expense0Advertising expense7,214Utilities expense5,771Totals$314,881$314,881

Problem 3-3A (Algo) Part 1

Required:

1.Prepar the necessary adjusting journal entries for itemsathroughh. Assume that adjusting entries are made only at year-end.

Problem 3-3A (Algo) Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P5

[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 itemsathroughhthat require adjusting entries on December 31.

Additional Information Items

1. An analysis of WTI's insurance policies shows that $3,864 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,349 are available at year-end.
3. Annual depreciation on the equipment is $15,458.
4. Annual depreciation on the professional library is $7,729.
5. 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 Revenue.
6. 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, $13,250 of the tuition revenue has been earned by WTI.
7. 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.
8. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE

Unadjusted Trial Balance

December 31

Debit Credit

Cash$26,793

Accounts receivable0

Teaching supplies10,304

Prepaid insurance15,458

Prepaid rent2,062

Professional library30,913

Accumulated depreciationProfessional library$9,275

Equipment103,000

Accumulated depreciationEquipment16,489

Accounts payable25,000

Salaries payable0

Unearned revenue11,500

Common stock32,351

Retained earnings76,000

Dividends41,220

Tuition revenue105,108

Training revenue39,158

Depreciation expenseProfessional library0

Depreciation expenseEquipment0

Salaries expense49,464

Insurance expense0

Rent expense22,682

Teaching supplies expense0

Advertising expense7,214

Utilities expense5,771

Totals$314,881$314,881

Problem 3-3A (Algo) Part 2

2-a.Post the balance from the unadjusted trial balance and the adjusting entries into the T-accounts.

2-b.Prepar an adjusted trial balance.

Problem 3-3A (Algo) Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P5

[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 itemsathroughhthat require adjusting entries on December 31.

Additional Information Items

1. An analysis of WTI's insurance policies shows that $3,864 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,349 are available at year-end.
3. Annual depreciation on the equipment is $15,458.
4. Annual depreciation on the professional library is $7,729.
5. 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 Revenue.
6. 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, $13,250 of the tuition revenue has been earned by WTI.
7. 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.
8. The balance in the Prepaid Rent account represents rent for December.

WELLS TECHNICAL INSTITUTE

Unadjusted Trial Balance

December 31

Debit Credit

Cash$26,793Accounts receivable0Teaching supplies10,304Prepaid insurance15,458Prepaid rent2,062Professional library30,913Accumulated depreciationProfessional library$9,275Equipment103,000Accumulated depreciationEquipment16,489Accounts payable25,000Salaries payable0Unearned revenue11,500Common stock32,351Retained earnings76,000Dividends41,220Tuition revenue105,108Training revenue39,158Depreciation expenseProfessional library0Depreciation expenseEquipment0Salaries expense49,464Insurance expense0Rent expense22,682Teaching supplies expense0Advertising expense7,214Utilities expense5,771Totals$314,881$314,881

Problem 3-3A (Algo) Part 3

3-a.Prepar Wells Technical Institute's income statement for the year.

3-b.Prepar Wells Technical Institute's statement of retained earnings for the year. The Retained Earnings account balance was $76,000 on December 31 of theprioryear.

3-c.Prepar Wells Technical Institute's balance sheet as of December 31.