[The following information applies to the questions displayed below.] Wells Technical Institute (WTI), a school owned by
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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
- An analysis of WTI's insurance policies shows that $3,600 of coverage has expired.
- An inventory count shows that teaching supplies costing $3,120 are available at year-end.
- Annual depreciation on the equipment is $14,400.
- Annual depreciation on the professional library is $7,200.
- 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 Revenue.
- 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, $10,700 of the tuition revenue has been earned by WTI.
- 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.
- The balance in the Prepaid Rent account represents rent for December.
WELLS TECHNICAL INSTITUTE | ||
---|---|---|
Unadjusted Trial Balance | ||
December 31 | ||
Debit | Credit | |
Cash | $ 27,094 | |
Accounts receivable | 0 | |
Teaching supplies | 10,420 | |
Prepaid insurance | 15,632 | |
Prepaid rent | 2,085 | |
Professional library | 31,262 | |
Accumulated depreciationProfessional library | $ 9,380 | |
Equipment | 101,000 | |
Accumulated depreciationEquipment | 16,675 | |
Accounts payable | 22,000 | |
Salaries payable | 0 | |
Unearned revenue | 14,000 | |
Common stock | 32,318 | |
Retained earnings | 75,000 | |
Dividends | 41,684 | |
Tuition revenue | 106,293 | |
Training revenue | 39,599 | |
Depreciation expenseProfessional library | 0 | |
Depreciation expenseEquipment | 0 | |
Salaries expense | 50,022 | |
Insurance expense | 0 | |
Rent expense | 22,935 | |
Teaching supplies expense | 0 | |
Advertising expense | 7,295 | |
Utilities expense | 5,836 | |
Totals | $ 315,265 | $ 315,265 |
Related Book For
Financial Accounting Information for Decisions
ISBN: 978-1259533006
8th edition
Authors: John J. Wild
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