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

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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

1. An analysis of WTI's insurance policies shows that $2,400 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,800 are available at year-end.
3. Annual depreciation on the equipment is $13,200.
4. Annual depreciation on the professional library is $7,200.
5. On September 1, WTI agreed to do five training courses for a client for $2,500 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 $12,500 cash in advance for all five training 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, $7,500 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	$ 34,000
Accounts receivable	0
Teaching supplies	8,000
Prepaid insurance	12,000
Prepaid rent	3,000
Professional library	35,000
Accumulated depreciationProfessional library		$ 10,000
Equipment	80,000
Accumulated depreciationEquipment		15,000
Accounts payable		26,000
Salaries payable		0
Unearned revenue		12,500
T. Wells, Capital		90,000
T. Wells, Withdrawals	50,000
Tuition revenue		123,900
Training revenue		40,000
Depreciation expenseProfessional library	0
Depreciation expenseEquipment	0
Salaries expense	50,000
Insurance expense	0
Rent expense	33,000
Teaching supplies expense	0
Advertising expense	6,000
Utilities expense	6,400
Totals	$ 317,400	$ 317,400

Problem 3-3A (Static) Part 3

3-a. Prepare Wells Technical Institute's income statement for the year. 3-b. Prepare Wells Technical Institute's statement of owner's equity for the year. The T. Wells, Capital account balance was $90,000 on December 31 of the prior year, and there were no owner investments in the current year. 3-c. Prepare Wells Technical Institute's balance sheet as of December 31.