Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P6 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 $3,335 of coverage has expired. b. An inventory count shows that teaching supplies costing $2,891 are available at year-end c. Annual depreciation on the equipment is $13,342 d. Annual depreciation on the professional library is $6,671. e. On September 1, WTI agreed to do five courses for a client for $2,800 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 $14,000 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, $9.403 of the tuition has been earned by WTL 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 $ 9,171 WELLS TECHNICAL INSTITUTE Unadjusted Trial Balance December 31 Debit Cash $ 26,491 Accounts receivable Teaching supplies 10, 187 Prepaid insurance 15, 284 Prepaid rent 2,039 Professional library 30,565 Accumulated depreciation Professional library Equipment 71,305 Accumulated depreciation-Equipment Accounts payable Salaries payable Unearned training fees T. Wells, Capital T. Wells, Withdrawals 40, 755 Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense 48,907 Insurance expense Rent expense 22,429 Teaching supplies expense Advertising expense 7,132 Utilities expense 5,706 Totals $280,800 16, 303 33,885 14,000 64,800 103,924 38,717 $280, 800