Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO A1, P1, P2, P3

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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, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of itemsathroughhthat require adjusting entries on December 31, 2017, follow.

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 2017.
3. Annual depreciation on the equipment is $15,458.
4. Annual depreciation on the professional library is $7,729.
5. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,500, 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 2018.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $5,100 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 nearest half-month; for example, October recognizes one-half month accrual.)
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, 2017 Debit Credit Cash $ 27,245 Accounts receivable 0 Teaching supplies 10,478 Prepaid insurance 15,719 Prepaid rent 2,097 Professional library 31,436 Accumulated depreciationProfessional library $ 9,432 Equipment 73,338 Accumulated depreciationEquipment 16,768 Accounts payable 36,749 Salaries payable 0 Unearned training fees 12,500 T. Wells, Capital 66,646 T. Wells, Withdrawals 41,916 Tuition fees earned 106,885 Training fees earned 39,820 Depreciation expenseProfessional library 0 Depreciation expenseEquipment 0 Salaries expense 50,300 Insurance expense 0 Rent expense 23,067 Teaching supplies expense 0 Advertising expense 7,336 Utilities expense 5,868 Totals $288,800 $288,800 Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts. _ \fPrepare an adjusted trial balance. Cash Accounts receivable Teaching supplies Prepaid insurance Prepaid rent Professional library Accumulated depreciationProfessional library Equipment Accumulated depreciationEquipment Accounts payable Salaries payable Unearned training fees T. Wells, Capital T. Wells, Withdrawals Tuition fees earned Training fees earned Depreciation expenseProfessional library Depreciation expenseEquipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals