Wells Technical Institute Adjusting Entries and Financial Statements

Wells Technical Institute (WTI)_Adjusting Entries and Financial Statements in $11 only

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, 2013, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of itemsathroughh that require adjusting entries on December 31, 2013, follow.
Additional Information Items

a.An analysis of WTI’s insurance policies shows that $3,350 of coverage has expired.
b.An inventory count shows that teaching supplies costing $3,750 are available at year-end 2013.
c.Annual depreciation on the equipment is $15,100.
d.Annual depreciation on the professional library is $9,100.
e.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 $4,400, 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 2014.
f.On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $4,900 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.)
g.WTI’s two employees are paid weekly. As of the end of the year, two days’ salaries have accrued at the rate of $290 per day for each employee.
h.The balance in the Prepaid Rent account represents rent for December.
WELLS TECHNICAL INSTITUTE
Unadjusted Trial Balance
December 31, 2013
DebitCredit
Cash$53,000
Accounts receivable0
Teaching supplies9,900
Prepaid insurance13,900
Prepaid rent4,900
Professional library54,000
Accumulated depreciation—Professional library$11,900
Equipment99,000
Accumulated depreciation—Equipment16,900
Accounts payable46,900
Salaries payable0
Unearned training fees22,000
Common stock29,000
Retained earnings99,000
Dividends69,000
Tuition fees earned146,700
Training fees earned59,000
Depreciation expense—Professional library0
Depreciation expense—Equipment0
Salaries expense69,000
Insurance expense0
Rent expense42,500
Teaching supplies expense0
Advertising expense7,900
Utilities expense8,300




Totals$431,400$431,400









2.

value:
10.00 points

2.Prepare the necessary adjusting journal entries for items a through h

Post the entries in T- Accounts

Prepare Adjusted Trial Balance

Prepare Income Statement, Statement of retained earnings, Balance Sheet

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