Problem 3-3A Preparing adjusting entries, adjusted trial balance, and financial statements LO P1, P2, P3, P4, P6

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[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

1. An analysis of WTI's insurance policies shows that $3,600 of coverage has expired.
2. An inventory count shows that teaching supplies costing $3,120 are available at year-end.
3. Annual depreciation on the equipment is $14,400.
4. Annual depreciation on the professional library is $7,200.
5. On September 1, WTI agreed to do five courses for a client for $2,200 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 $11,000 cash in advance for all five courses on September 1, and WTI credited Unearned Training Fees.
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, $12,200 of the tuition 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 Credit $ Debit 26,340 0 10,129 15,197 2,027 30, 391 $ 9, 119 70,903 16,210 36,612 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 T. Wells, Capital 1. Wells, Withdrawals Tuition fees earned Training fees earned Depreciation expense-Professional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals 11,000 64,431 40,523 103,332 38,496 0 48,628 0 22, 297 7,092 5,673 $ 279,200 $279,200 Post the balance from the unadjusted trial balance and the adjusting entries in to the T-accounts. Cash Equipment Unadj. Bal. Unadj. Bal Adj. Bal. 0 Adj. Bal. 0 Accounts Receivable Accumulated Depreciation Equipment Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. 0 Teaching Supplies Accounts Payable Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. 0 Prepaid Insurance Salaries Payable Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. 0 Prepaid Rent Unearned Training Fees Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. 0 Professional Library T. Wells, Capital Professional Library T. Wells, Capital Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. T. Wells, Withdrawals Accumulated DepreciationProfessional Library Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. 0 Tuition Fees Earned Rent Expense Unadj. Bal. Unadj. Bal Adj. Bal. 0 Adj. Bal. 0 Training Fees Earned Teaching Supplies Expense Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. 0 Advertising Expense Depreciation Expense-Professional Library Unadj. Bal. Unadj. Bal Adj. Bal. 0 Adj. Bal. 0 Utilities Expense Depreciation Expense-Equipment Unadj. Bal. Unadj. Bal Salaries Expense Insurance Expense Unadj. Bal. Unadj. Bal. Adj. Bal. 0 Adj. Bal. 0 Prepare an adjusted trial balance. Credit WELLS TECHNICAL INSTITUTE Adjusted Trial Balance December 31 Debit Cash $ 26,340 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 T. Wells, Capital T. Wells, Withdrawals Tuition fees earned Training fees earned Depreciation expenseProfessional library Depreciation expense-Equipment Salaries expense Insurance expense Rent expense Teaching supplies expense Advertising expense Utilities expense Totals $ 26,340 $ 0